ICRA Nepal affirms AMC Quality 3 rating of Sanima Capital; Rating indicates adequate assurance on management quality

ICRA Nepal has reaffirmed FMQR of [ICRANP] AMC Quality 3 (AMC 3; pronounced ICRA NP Asset Management Company Quality Three) assigned to Sanima Capital Limited (SCL or the company). The rating indicates adequate assurance on the management quality. 

Strengths

• Strong ownership profile
• Healthy fund performance so far
• Experienced fund supervisors
• Regulatory changes likely to bring in new sector scrips and hence increase market depth

Challenges

• Limited track record in fund management
• Significant market downturn over last three years with periodic short-term volatility
• Mutual fund industry itself in developing stage
• Limited investment diversification avenues so far
• Low attraction of MF schemes among the investors

About the company   

Established in December 2015, Sanima Capital Limited (SCL) is a wholly-owned subsidiary of Sanima Bank Limited (rated at [ICRANP-IR] A for issuer rating). SCL has obtained a mutual fund depository licence in addition to the fund manager’s licence from the Securities Board of Nepal (SEBON) as per the Mutual Fund Regulation, 2010. It currently acts in both the capacities for its first mutual fund scheme viz. Sanima Equity Fund (SAEF), launched in December 2017. The company has a licence from SEBON to work as an investment banker (including services like asset management services, private placement, portfolio management and depository participant) and a merchant banker (including services like issue management, share registrar, underwriting etc). SCL reported a net profit of ~NPR 35 million in FY2019 (YoY growth of ~106%) over an asset base of NPR 412 million as of mid-July 2019. 

Source: ICRA Rating Nepal