IPO of IME Life Insurance Company Opens From Today; A Thorough Look Into Company Performance and Vital Fundamentals
Thu, Jul 6, 2023 8:17 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
IME Life Insurance Company Limited is a life insurance company registered at Office of Company Registrar under the Company Act 2006 on October 1, 2008, and obtained a license from Insurance Board on July 4, 2017. The company had an asset base of Rs. 5,281 Million as on July 15, 2021. The capital structure of the company comprises an authorized capital of Rs. 2 Billion out of which Rs. 1.40 Billion is paid-up capital from the promoter groups.
About the issue:
IME Life Insurance Company Limited is opening the issue of 96,00,000 unit shares to the general public from today i.e. on 21st Ashad, 2080. The early closing date of this issue is on 25th Ashad and if the issue is not fully subscribed, it can be extended up to 4th Shrawan, 2080.
The issued capital of the life insurance company is Rs. 4 Arba of which 30% i.e. 1,20,00,000 unit shares is for the public (Nepalese citizens working abroad and the general public). Out of this total issue, 10% i.e. 12,00,000 unit shares were allocated for Nepalese citizens working abroad, whereas 5% i.e 600,000 units have been set aside for the employees of the company and 5% of the total offered shares i.e. 600,000 units have been set aside for the mutual funds. The remaining 96,00,000 units are for the general public.
The shares will be issued for Rs. 236.91 per share (Rs 100 face value + Rs 136.91 premium price) to the general public and for the employees of the company at a par value of Rs. 100.
Civil Capital Market is appointed as the issue manager. The IPO issue will raise a total of Rs. 2.76 Arba for the company. Out of this Rs 1.56 Arba will be the premium amount and the rest would add to the paid-up capital. The current paid-up capital of the company is Rs. 2.80 Arba.
Click here for the offer letter
| IME Life Insurance Company Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 40,000,000.00 | 4,000,000,000.00 |
| Total Issue (General Public) | 30% | 12,000,000.00 | 1,200,000,000.00 |
| Issue Manager | Civil Capital Market Limited | ||
| Issue Open Date | 21st Ashad | ||
| Issue Closing Date | 25th Ashad | ||
| Issue Late Closing Date | 4th Shrawan | ||
| Minimum Application | 10 | ||
| Maximum Application | 10,000 | ||
Capital Structure:
| Authorized Capital | 5,000,000,000 |
| Issued Capital | 4,000,000,000 |
| Current Paid-Up Capital | 2,800,000,000 |
| Capital after IPO Issuance | 4,000,000,000 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 28,000,000.00 | 2,800,000,000.00 | 70% | Already issued |
| General Public (Including Nepalese citizens working abroad) | 12,000,000.00 | 1,200,000,000.00 | 30% | To be issued |
Uses of Funds:
| S. No. | Particulars | Amount |
|---|---|---|
| 1 | Government Bond | Rs. 11.55 Crores |
| 2 | Fixed Deposit | Rs. 1.91 Arba |
| 3 | Corporate Debentures | Rs. 56.30 Crores |
| 4 | Initial Public Offerings | Rs. 6.93 Crores |
| 5 | Mutual Funds | Rs. 3.62 Crores |
| 6 | Hydropower Projects | Rs. 5 Crores |
| 7 | Branch Expansion | Rs. 80 Lakhs |
| Total | Rs. 2.76 Arba | |
Board of Directors:
| Name | Position |
|---|---|
| Dr. Ram Hari Aryal | Chairman |
| Mr. Deep Chandra Regmi | Director |
| Usha Dhakal | Director |
| Mr. Binod K.C | Independent Director |
Financial Highlights:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/80 (Q3) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital ('000) | 1,400,000.00 | 1,400,000.00 | 1,400,000.00 | 2,800,000.00 | 5,000,000.00 | 5,000,000.00 | 5,000,000.00 |
| Reserve & Surplus ('000) | - | - | - | - | - | - | - |
| Share Premium ('000) | - | - | - | 497.00 | - | - | - |
| Contingent Fund ('000) | 44,063.00 | 73,448.00 | 103,986.00 | 122,231.00 | 141,829.00 | 190,213.00 | 252,738.00 |
| Accumulated Fund ('000) | 213,175.00 | 295,268.00 | 406,917.00 | 572,941.00 | 630,286.00 | 994,888.00 | 1,493,187.00 |
| Other Reserves ('000) | 180,406.00 | 366,401.00 | 560,477.00 | 564,432.00 | 1,239,221.00 | 1,308,016.00 | 1,373,435.00 |
| Net Premium ('000) | 1,414,183.00 | 2,897,477.00 | 3,549,518.00 | 2,818,969.00 | 4,723,232.00 | 6,018,832.00 | 7,687,396.00 |
| Net Profit ('000) | 198,623.00 | 296,239.00 | 325,353.00 | 193,313.00 | 378,433.00 | 483,836.00 | 625,251.00 |
| Earnings per share (Rs.) | 14.19 | 21.16 | 23.24 | 9.21 | 7.57 | 9.68 | 12.51 |
| Net worth per share (Rs.) | 131.26 | 152.51 | 176.53 | 145.00 | 140.23 | 149.86 | 162.39 |
| Return on Equity (%) | 1.26 | 1.68 | 1.66 | 0.57 | 0.61 | 0.77 | 0.98 |
Credit Rating:
CARE Ratings Nepal Limited (CRNL) has reaffirmed the rating of ‘CARE-NP BBB (Is)’ assigned to IME Life Insurance Company Limited. Issuers with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations, in Nepal.
Key Rating Strengths:
- Association with strong promoter group experienced board and management team.
- Moderate financial risk profile supported by the growing scale.
- Adequate geographical coverage through branches and sub-branches.
- Adequate reserve and reinsurance arrangement.
- Improving trend in solvency ratio in FY22.
- Good assets quality of investment book.
Key Rating Weaknesses:
- Short track record and competition from other insurance companies coupled with a relatively small market share in the life insurance industry.
- Deterioration in combined ratio marked by an increase in claims ratio.
- Exposure to Regulatory Risk.
