"12% ICFC Finance Debenture 2083" opens application from Falgun 13, 2076; Find the information you need to make your decision

Sun, Feb 23, 2020 12:38 PM on Bonds & Debentures, Exclusive, Stock Market,

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Company profile

ICFC is a national level class “C” finance company incorporated on September 22, 2003 as Investment and Credit Finance Company Limited which was changed to ICFC Finance Ltd. on March 1, 2010. It is licensed by NRB on July 14, 2004 and commenced operation on July 17, 2004. It is one of the leading finance companies in Nepal. In terms of technology, it is using PUMORI PLUS IV software which enables to provide real-time services to the consumer across all branches. It has total assets size of Rs 14,439 Mn at the end of Q1FY20 which grew by 31.59% over FY19. At the end of Q1FY20, it has Rs 882 Mn paid-up capital which is distributed among promoters and public shareholders in the ratio of 51:49 and the shares are listed in Nepal Stock Exchange Ltd. (Rs 1,367 Mn market capitalization as of November 27, 2019). Mr. Purshottam Poudyal (6.35%), United Distributor Nepal P. Ltd. (3.79%), and Mr. Sushil Kumar Pant (3.62%) are major promoter shareholders of the company.

Objective

About the issue

ICFC Finance Limited (ICFC) is issuing a total of 2 Lakh units of debentures at par value of Rs.1000 per unit. The issue will open from Falgun 13, 2076 to Falgun 16, 2076. In case of under subscription, the issue will be extended till Falgun 27, 2076.

The total value of "12% ICFC Finance Debenture 2083" is Rs.20 Crore and will provide 12% interest. The debentures will mature in 7 years i.e. 2083. Out of the total units, 80,000 units (40% of the issue) is for the general public while 120,000 units (60% of the issue) will be privately placed. Similarly, 5% of debenture issued for the general public i.e 4,000 units is reserved for Mutual Funds.

Global IME Capital Limited has been appointed as the issue manager.

Interested applicants can apply for a minimum of 25 units or a maximum of 76,000 units.

Capital structure

Shareholding structure

Primary shareholders

Board of Directors

Management Team

*There are 153 employees in total.

Rating

CARE Ratings Nepal (CRNL) has assigned Issuer Rating of CARE-NP BBB- (Is) to ICFC Finance Limited (ICFC). CRNL has also reaffirmed rating of CARE- NP BBB- assigned to Subordinated Debenture “12% ICFC Finance Ltd. Debenture 2083”. Issuers with this rating are considered to offer a moderate degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry moderate credit risk.

Key Rating Strength

Long track record of operation with an experienced board and management team
Considerable growth in loans & advances and deposits over the period
Moderate capital adequacy level
Good asset quality, however, slightly deteriorated in Q1FY20
Diversified sector-wise credit portfolio distribution
Moderate concentration over top 20 depositors
Healthy financial performance, however, volatile over the period
Comfortable liquidity profile

Key Rating Weaknesses

Low level of CASA declining over the period
Geographical concentration of business
High concentration over top 20 borrowers, however, decreased in Q1FY20
Significant decrease in fair value of an investment over cost price despite diversified investment portfolio
Exposure to regulatory risks related to the Finance industry
Competition from other Finance Companies and Banks

Source: https://careratingsnepal.com/

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