ACKO sets IPO wheels in motion, eyes $2

ACKO sets IPO wheels in motion, eyes $2-2.5 billion valuation

The IPO is likely to include a mix of fresh issue and an offer for sale (OFS) by existing investors, with the company targeting a valuation of $2 billion-$2.5 billion.

By Shruti Mishra

Digital-first insurer ACKO has appointed ICICI Securities, Morgan Stanley and Kotak Securities as book-running lead managers for its proposed initial public offering (IPO), according to people familiar with the development.

The Bengaluru-based company is expected to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in the coming months. The sources declined to be named as the discussions are private.

The IPO is likely to include a mix of fresh issue and an offer for sale (OFS) by existing investors, with the company targeting a valuation of $2 billion-$2.5 billion.

Founded by Varun Dua, ACKO received its license in late 2017 and commenced operations in 2018. Since then, the company has raised over $583 million from investors including General Atlantic, Multiples PE, Accel, Elevation Capital and Canada Pension Plan Investment Board.

A differentiated bet in a legacy-heavy sector

In a general insurance market historically dominated by intermediaries, ACKO has positioned itself as a direct-to-consumer (D2C) player, bypassing agents and traditional distribution channels that account for a significant portion of industry costs.

One of India’s fastest-growing general insurers, in FY25, the company reported revenue of ₹2,837 crore, marking a 35% year-on-year increase - significantly outpacing the broader insurance sector, which grew at under 10% during the same period.

The company also reported a 37% reduction in net losses, signaling improving unit economics as it scales.

The road ahead

With IPO preparations underway, ACKO is entering a critical phase - transitioning from a high-growth private startup to a publicly listed company.

Its core thesis remains unchanged: eliminate intermediaries, own the customer relationship, and drive profitability through renewals and cost efficiencies.

As it gears up for the public markets, the key question will be whether its digital-first, zero-commission model can sustainably deliver both growth and profitability at scale.