Upsetting the plan of Fairfax, owned by Indian origin Canadian billionaire Prem Watsa, to increase its stake in Indian insurance joint venture Go Digit General Insurance, insurance regulator IRDAI has rejected its proposal to convert the company’s holdings in compulsory convertible preferred shares (CCPS) issued by Go Digit Infoworks into equity shares.
Go Digit Infoworks Services, based in Pune, is the parent company of Go Digit Insurance. Fairfax currently owns 45.3 per cent of Go Digit Infoworks, which has an 83 per cent stake in Go Digit General Insurance.
The Fairfax proposal would have increased its stake to 74 per cent from 49 per cent in Go Digit General Insurance, which is engaged in the general insurance business in India. Fairfax is expected to make a gain of approximately $375 million when it achieves majority ownership of Digit.
“In June 2022, Digit Insurance and Fairfax Financial Holdings applied to the IRDAI for approval to convert the company’s holdings in compulsory convertible preferred shares issued by Go Digit Infoworks into equity shares of Go Digit Infoworks,” Fairfax Financial Holdings said in a note.
