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India's markets regulator has given Digit Insurance the go-ahead to launch an IPO after multiple compliance issues delayed approval for the deal originally planned in 2022, according to a letter seen by Reuters.

Digit, last valued at $3.5 billion, filed for an initial public offering in August 2022 but its plans were halted twice by the Securities and Exchange Board of India, which raised concerns over the legality of some share issuances, Reuters reported.

After addressing the issues, Digit, which operates in the general insurance sector and counts Canadian billionaire Prem Watsa's Fairfax Group and A91 Partners among its backers, refiled its IPO papers with SEBI last March, which the regulator has now approved.

"The proposed issue can open for subscription within a period of 12 months," said the letter sent on Friday to Digit and its IPO advisers, seen by Reuters.

The letter doesn't specify earlier compliance issues or SEBI's position, but two sources familiar with it said the go-ahead means the regulator is satisfied with the IPO application.

Digit declined to comment while SEBI did not immediately respond to a request for comment.

Digit now plans to market its IPO to prospective investors over the next month and targets a listing by May, said a person with direct knowledge of the matter.

It plans to raise 12.5 billion rupees ($151 million) through its listing in addition to an offer for the sale of 109.4 million shares, its prospectus shows.

Digit's listing plans coincide with a record boom in India's stock markets and public listings, and bankers expect 2024 to be one of the country's biggest ever years for IPOs, Reuters earlier reported.