IPO of Reliable Nepal Life Insurance Opens From Today; A Thorough Look Into Company Performance and Vital Fundamentals
Tue, Aug 8, 2023 11:28 AM on IPO/FPO News, Company Analysis, Stock Market, Latest,
Company Profile:
Reliable Nepal Life Insurance Limited is a life insurance company registered at the Office of Company Registrar under the Company Act 2006 on December 04, 2007, and obtained a license from Insurance Board on August 02, 2017. The company has a network of 9 branches (including head office), 69 sub-branches, and 28,655 insurance agents as of Mid-April, 2023. The company had an asset base of Rs. 11,856 Mn as of Mid-April 2023. The paid-up capital of the company stood at Rs. 2,800 Mn as of Mid-April, 2023.
About the issue:
Reliable Nepal Life Insurance Limited is opening the issue of 96,00,000 unit shares to the general public from today i.e. on 23rd Shrawan, 2080. The early closing date of this issue is on 26th Shrawan and if the issue is not fully subscribed, it can be extended up to 5th Bhadra, 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. 257 per share (Rs 100 face value + Rs 157 premium price) to the general public and for the employees of the company at a par value of Rs. 100.
Civil Capital Market Limited is appointed as the issue manager. The IPO issue will raise a total of Rs. 2.98 Arba for the company. Out of this Rs 1.78 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
| Reliable Nepal Life Insurance Company | |||
|---|---|---|---|
| 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 | ||
| Issue Open Date | 23rd Shrawan | ||
| Issue Closing Date | 26th Shrawan | ||
| Issue Late Closing Date | 5th Bhadra | ||
| Minimum Application | 10 | ||
| Maximum Application | 5,400 | ||
Capital Structure:
| Authorized Capital | 5,500,000,000 |
| 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. N | Particulars | Amount |
|---|---|---|
| 1 | Government Bond | Rs. 35.52 Crores |
| 2 | Fixed Deposit | Rs. 1.61 Arba |
| 3 | Corporate Debentures | Rs. 48.43 Crores |
| 4 | Initial Public Offerings | Rs. 32.29 Crores |
| 5 | Mutual Funds | Rs. 6.45 Crores |
| 6 | Hydropower Projects | Rs. 32.29 Crores |
| 7 | Branch Expansion | Rs. 6.45 Crores |
| Total | Rs. 2.98 Arba | |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Udaya Nepali Shrestha | Chairman |
| Mrs. Anju Pandey Pant | Director |
| Mr. Indra Prasad Sharma | Director |
| Mr. Sharad Chandra Poudel | Independent Director |
| Prof. Dr. Prakash Bhattarai | 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 | 2,800,000.00 | 5,000,000.00 | 5,000,000.00 |
| Reserve & Surplus ('000) | - | - | - | - | - | - | - |
| Share Premium ('000) | - | - | - | - | - | - | - |
| Contingent Fund ('000) | 32,473.00 | 57,482.00 | 87,586.00 | 135,923.00 | 141,116.00 | 212,258.00 | 303,456.00 |
| Accumulated Fund ('000) | - | - | - | - | - | - | - |
| Other Reserves ('000) | - | - | - | - | - | - | - |
| Net Premium ('000) | 1,621,909.00 | 3,072,373.00 | 4,044,094.00 | 2,741,310.48 | 4,073,582.00 | 5,367,887.00 | 6,978,253.00 |
| Net Profit ('000) | 238,830.00 | 247,210.00 | 342,498.00 | 285,736.24 | 535,298.00 | 711,420.00 | 911,980.00 |
| Earnings per share (Rs.) | 17.06 | 17.66 | 24.46 | 13.61 | 19.12 | 14.23 | 18.24 |
| Net worth per share (Rs.) | 123.32 | 141.03 | 162.29 | 153.00 | 148.99 | 157.46 | 175.70 |
| Return on Equity (%) | 1.71 | 1.77 | 2.45 | 1.02 | 1.91 | 1.42 | 1.82 |
CARE Ratings Nepal:
CARE Ratings Nepal Limited (CRNL) has revised the issuer rating assigned to Reliable Nepal Life Insurance Limited to ‘CARE-NP BBB+ (Is)’ from ‘CARE-NP BBB (Is)’. 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 Strengths
- Experienced board and management team.
- Adequate geographical coverage through branches.
- Improving financial risk profile supported by the growing scale.
- Adequate reserve and reinsurance arrangement.
- Good assets quality of investment book.
- Improving solvency profile.
Key Rating Weakness
- 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.
