NIC Asia Flexi Cap Fund Opens From Today; All information You Need To Know In One Place
Thu, Jun 2, 2022 7:18 AM on IPO/FPO News, Mutual Fund, Company Analysis,
Company Profile
The mutual fund scheme “NIC Asia Flexi Cap Fund (NICAFCF)” is promoted by NIC Asia Bank and managed by NIC Asia Capital.
NIC Asia Capital Limited (NICAC) was incorporated in 2016 as a wholly-owned subsidiary of NIC Asia Bank Limited. The company is licensed by the SEBON to work as an investment banker (including services such as mutual fund, private placement, and portfolio management) and as a merchant banker (including services as issue management, depository participant, and registrar to share and underwriting services). NICAC has obtained a depository participant’s license in addition to the fund manager’s license from SEBON and operates in both capacities for all its mutual fund schemes. NICAC reported a net profit of ~NPR 108 million for FY2021 (~152% YoY growth) over an asset base of NPR 664 million as of mid-July 2021.
NIC Asia Bank (NICA) is “A” Class Licensed Institution from Nepal Rastra Bank (NRB) Around 93.5% of the total shareholding of the Bank is held by individuals and around 6.5% by corporate entities (other than GoN and Licensed Institutions) as on July 15, 2021; among which 51% belongs to promoter group shares and 49% belongs to the general public. The Bank has three wholly-owned subsidiary companies operating within the territory of Nepal. One of them is NIC ASIA Capital Limited (incorporated to undertake Merchant Banking activities), and the other is NIC ASIA Laghubitta Bittiya SansthaLimited (Microfinance), and NIC Asia Securities.
About the issue
NIC Asia Capital Limited sets to open a new closed-end mutual fund scheme “NIC Asia Flexi Cap Fund” worth Rs 1 arba with a maturity of 7 years.
The opening date of this fund is on 19th Jestha and the closing date is on 24th Jestha, 2079 at the earliest. If the application is not adequately subscribed the closing date will be extended up to Ashadh 02.
This fund is managed by NIC Asia Capital Limited and sponsored by NIC Asia Bank.
The issue will be of 10 crore units worth Rs 1 arba and the per-unit cost is Rs 10. An investor can apply for a minimum of 100 units and a maximum of 1 crore units.
15% of the total units i.e. 1.50 crore units worth Rs. 15 crores have been allocated to the fund promoter NIC Asia Bank Limited and the remaining 8.50 crores units will be allocated to the general public.
As of now, NIC Asia Capital manages three close-ended mutual funds i.e : the NIC Asia Growth Fund (NICGF), NIC ASIA Balanced Fund (NICBF) and NIC Asia Select-30 (NICSF) and one open-ended fund : the NIC Asia Dynamic Debt Fund (NADDF).
| NIC Asia Flexi Cap Fund | |
|---|---|
| Fund Size | Rs. 1 Arba |
| Per Unit Price | Rs. 10 |
| Total Units | 10,00,00,000 |
| Fund Sponsor | NIC Asia Bank |
| Fund Manager and Depository | NIC Asia Capital |
| Seed Fund by NIC Asia Bank - 15% (units) | 1,50,00,000 |
| General Public (units) | 8,50,00,000 |
| Nature of Scheme | Close-end Fund |
| Fund Maturity | 7 Years |
| Minimum units to be applied | 100 |
| Maximum units to be applied | 1,00,00,000 |
| Issue open date | Jestha 19, 2079 |
| Issue closing date (earliest) | Jestha 24, 2079 |
| Issue closing date (latest) | Ashadh 2, 2079 |
| CARE rating of NIC Asia Bank | CARE-NP A-(Is) |
| ICRA rating of NIC Asia Capital | [ICRANP] AMC Quality 3 (AMC 3) |
Dividend Payout
The dividend will be paid out of realized profits in proportion to investments made. The Retained earnings will be re-invested if any.
Supervisors of NICAFCF
| S No. | Name | Qualification |
|---|---|---|
| 1 | Ashish Adhikari | Legal Management (LM) |
| 2 | Bodh Raj Niraula | Master in Economics (ME) |
| 3 | Shivaraj Ghimire | MBA |
| 4 | Santosh Lamichhane | CPA, CGA, FCCA, MBS |
| 5 | Mahendra Nath Karmacharya | Masters of Commerce (M. Com) |
General Asset Allocation of the proposed scheme's portfolio
| S.N. | Type of Instrument | Normal Allocation (of Net Assets) | ||||||
|---|---|---|---|---|---|---|---|---|
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | ||
| 1 | Fixed Income | 15% | 20% | 25% | 27% | 27% | 16% | 50% |
| 2 | Investment in Ordinary shares | 80% | 75% | 70% | 65% | 65% | 70% | 30% |
| 3 | Others | 5% | 5% | 5% | 8% | 8% | 14% | 20% |
| Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |
Capital structure of NIC Asia Capital:
| Particulars | Amount |
|---|---|
| Authorized Capital | Rs. 20 Crores |
| Issued Capital | Rs. 20 Crores |
| Paid-up Capital | Rs. 20 Crores |
Board of directors
| S. No | Name | Position |
|---|---|---|
| 1 | Mr. Kapil Dhakal | Chairman |
| 2 | Mr. Dinesh Bhari | Director |
| 3 | Mr. Rupesh Luitel | Director |
| 4 | Mr. Suman Dangol, FCA | Independent Director |
| 5 | Mr. Rabin Sapkota, FCA | Independent Director |
Investment Avenues:
- Securities that are registered with SEBON.
- Securities called for a public offering.
- Securities that are listed in NEPSE.
- Debentures, Treasury Bills, and other instruments of money market issued by Government of Nepal or Government Agencies receiving full guarantee or protection of GoN or NRB.
- Bank deposits.
- Money Market Instruments.
- Other areas as prescribed by SEBON.
CARE Rating of NIC Asia Bank:
CARE Ratings Nepal Limited (CRNL) has revised the issuer rating of NIC Asia Bank Limited (NIC Asia) to “CARE-NP A- (Is) [Single A Minus (Issuer)]‟ from “CARE-NP A (Is) [Single A (Issuer)]”. Issuers with this rating are considered to offer adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry low credit risk.
Key Grading Weakness:
- Moderate capitalization is a key concern as post-pandemic recovery remains largely unpredictable.
- Moderate liquidity profile.
- Intense competition.
- Exposure to regulatory risk related to the industry.
Key Grading Strengths:
- Long track record of operation, diversified geographical coverage with experienced promoters and management team.
- Good asset quality.
- The increasing scale of operations is backed by consistent growth in deposits, offset to some extent by higher growth in loans & advances amid the pandemic.
- Good profitability and sustained growth in total income and net profit in FY21; continued growth in H1FY22 despite the industry-wide slowdown.
- The diversified loan portfolio, concentration on Retail and SME portfolio.
ICRA Rating:
ICRA Nepal has reaffirmed the FMQR of [ICRANP] AMC Quality 3 (AMC 3; pronounced ICRA NP Asset Management Company Quality Three) assigned to NIC Asia Capital Limited (NICAC). The rating indicates an adequate assurance of management quality.
Key Strengths:
- Satisfactory fund performance so far.
- Full ownership and continued support from the parent bank.
- Experienced fund supervisors and directors/management team.
- Regulatory support for the development of the MF industry and financial market.
Key Challenges:
- A volatile operating environment could impact NAV trajectory.
- Limited track record in MF management.
- Limited investment diversification avenues so far; expected to gradually improve.
- Sectoral concentration risks.
- The moderate attraction of MF schemes among investors, albeit improving in recent periods.
