Exclusive: Digit Insurance expands its ESAR pool to $145 Mn

On the lines of several IPO-bound companies, general insurance firm Digit Insurance has expanded its stock appreciation rights (ESARs) for its employees. This has come soon after the Securities Exchange Board of India put a hold on the company’s IPO for unknown reasons.

The board at Digit Insurance has passed a special resolution to increase the limit of ESARs by adding 57,02,272 ESARs, regulatory filings with the Registrar of Companies (RoC) show.

ESARs are a type of employee compensation linked to the company stock, meaning if the stock price goes up, employees receive the proceeds.

The Bengaluru-based firm already has a pool of 2,91,82,609 ESARs options which has now been increased to 3,48,84,881, following the addition of new rights.

As per Fintrackr’s estimates, the fresh employee stock appreciation rights for Digit Insurance are worth Rs 187 crore or $23.6 million whereas the total value of the company’s ESARs pool has crossed Rs 1,144 crore or $145 million.

In May, Digit cornered a new tranche of funding worth Rs 417 crore led by existing investors Sequoia Capital and India Infoline at a valuation of $4 billion. The company is the highest valued startup in its segment followed by its competitor Acko which also turned unicorn in October last year after $255 million round.

Founded in 2017 with backing from Prem Watsa’s Fairfax Group, Digit is a general insurance company that deals in health, car, bike, and travel insurance. According to the company, Motor is the largest category for Digit followed by fire and health insurance.

Digit Insurance’s net earned premium rose 75% to Rs 3,404 crore in FY22 from Rs 1,944 crore in the previous fiscal year. Meanwhile, the company’s net loss widened 140% to Rs 296 crore in FY22 as compared to Rs 123 in FY21.

In 2022, many growth and late-stage companies have expanded their ESOP pool as it helps them to attract and retain talent. As per data compiled by Fintrackr, around 17 Indian startups have expanded their ESOP pool in 2022 so far. The list includes Minimalist, Waycool, Jar, upGrad, Amagi, Scripbox, NoBroker, DealShare, Money View, Purplle, LEAP, Wiz Freight, Ather Energy, Ninjacart, Ecom Express, Pine Labs and VeGrow among others.