How much to apply in the IPO of Nadep Laghubitta? See its past performance & projected financials (with exclusive video)

NADEP Laghubitta Bittiya Sanstha Limited is all set to issue its Initial Public Offering for the general public from Asadh 10 to Asadh 13, 2075. NADEP will be issuing 4,80,000 units shares in the public issue. The microfinance company will be issuing 30% of its total paid up capital to as the initial public offering. After the issue, its capital structure will be 70% promoters and 30% ordinary shares. After the issuance of IPO, its paid-up capital will reach Rs 16 crore.

Overview of the Issue:

Nadep Laghubitta Bittiya Sanstha is issuing 4.80 lakh unit shares as initial public offering. The microfinance company has separated 5% i.e. 24,000 unit shares for its employees and 5% for the mutual funds. The general public will be applying for 4,32,000 unit shares of the microfinance company. Nabil Investment Banking Limited has been appointed as the issue manager for the IPO issuance. The interested investors can apply for a minimum 20 unit of shares and can apply for a maximum 2,400 unit of shares.

Company Profile:

Nadep Laghubitta Bittiya Sanstha is a ‘D’ class licensed financial institution which started its operations from Jestha 01, 2072. It has its base in Gajuri, Dhading and has been providing microfinance services from its 62 branches. Licensed to work from 33 districts, Nabil Bank Limited, Lumbini Bikas Bank and Deprosc Nepal are among the major promoter shareholders of the microfinance.

Capital Plan:

Every company plans on expanding its work area. Nadep Laghubitta has also planned its capital increment accordingly.

       The current paid-up capital of the microfinance company is Rs 11.20 crore and its reserve stands at Rs 15.56 crore. After the issuance of IPO, its paid-up capital will rise to Rs 16 crore. In the same fiscal year, the microfinance company has planned to raise its capital to Rs 24 crore. It can be assumed that the company will be providing 50% bonus shares worth Rs 8 crore after the issuance of IPO, however, not confirmed.

Furthermore, according to the prospectus, in the FY 2075/76 its paid up capital will be raised to Rs 48 crore and in the FY 2076/77 its paid up capital will be raised to Rs 60 crore.

Net worth per share:

Net worth per share determines the how much equity is present in each share of the company. It is a measurement of the net worth of the company for each share of stock that has been issued. The net worth per share plays a vital role in the preliminary analysis of a company. Many investors take their investment decision based on the value of net worth per share of a company as well.

After the increment of number of shares in the company, the net worth per share of the company is expected to decrease.

Understand how much to apply on NADEP IPO (Exclusive Video)

Net Profit:

Net profit shows the real picture of a company’s performance. It is the easiest factor to be analyzed before making the investment decision. Any layman investor can also know the representation denoted by the net profit. In case of Nadep Laghubitta, the microfinance company has continuously been reporting remarkable financial performances over the years.

The performance of the microfinance is clearly represented by the actual as well as projected net profit of the company. It has reported outstanding financial results in the past few years and has plans on continuing the performance in the similar manner.

Borrowings and Lending:

The main portion of a banking institutions’ earning is generated from its lending. The borrowings and lending of a microfinance institution shows the financial performance of the institution.

The borrowing as well as lending of the microfinance company has shown an increasing trend and the projection of the company is also towards increment in the upcoming fiscal years. So the microfinance company’s future can be assumed to be better along with the passage of time.

How much to apply in the IPO?

Microfinance companies have proved to be hot cakes in the primary market with huge reception from the general public. If the past trends are to be considered, the issue will be oversubscribed in the 1^st day itself and the allotment will be made through lottery system. The applicants are supposed to receive only 10 unit shares. So it is advised to apply for the minimum units i.e. 20 units.