Sun Nepal Life Insurance Company Opens From Today; A Thorough Look Into Company Performance and Vital Fundamentals
Thu, Aug 17, 2023 7:08 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Sun Nepal Life Insurance Company Limited is a life insurance company that obtained its license from Insurance Board on August 2, 2017. The company has been offering an extensive range of products such as Money Back, Endowment, Whole Life, Term Assurance products, etc. through its diversified sales network. It has a branch network of 21 (including head office), 56 sub-branches, and 15,838 insurance agents as of Mid-Dec 2019.
About the issue:
Sun Nepal Life Insurance Company Limited is opening the issue of 76,80,000 unit shares to the general public from today i.e. on 32nd Shrawan, 2080. The early closing date of this issue is on the 4th Bhadra and if the issue is not fully subscribed, it can be extended up to the 14th Bhadra, 2080.
The issued capital of the life insurance company is Rs. 3.2 Arba of which 30% i.e. 96,00,000 unit shares are for the public (Nepalese citizens working abroad and the general public). Out of this total issue, 10% i.e. 960,000 unit shares were issued to Nepalese citizens working abroad from 1st Shrawan to 15th Shrawan. The remaining 86,40,000 units are to be issued to the general public (including employees of the company and mutual funds) from the mentioned date above.
Out of the total 86,40,000 units; 5% i.e. 480,000 units have been set aside for the mutual funds while 5% or 480,000 units have been set aside for the employees of the company (at the rate of Rs. 100 per share). The remaining 76,80,000 units are for the general public.
The shares will be issued for Rs. 239 per share (Rs 100 face value + Rs 139 premium price) to the general public.
Nepal SBI Merchant Banking has been appointed as the issue manager. The IPO issue will raise a total of Rs. 2.22 Arba for the company. Out of this Rs 1.26 Arba will be the premium amount and the rest would add to the paid-up capital.
Click here for the offer letter
| Sun Nepal Life Insurance Company Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 32,000,000.00 | 3,200,000,000.00 |
| Total Issue (General Public) | 30% | 9,600,000.00 | 960,000,000.00 |
| Issue Manager | Nepal SBI Merchant Banking | ||
| Issue Open Date | 32nd Shrawan | ||
| Issue Closing Date (earliest) | 4th Bhadra | ||
| Issue Late Closing Date | 14th Bhadra | ||
| Minimum Application | 10 | ||
| Maximum Application | 20,000 | ||
Capital Structure:
| Authorized Capital | 5,000,000,000.00 |
| Issued Capital | 3,200,000,000.00 |
| Current Paid-Up Capital | 2,240,000,000.00 |
| Capital after IPO Issuance | 3,200,000,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 22,400,000.00 | 2,240,000,000.00 | 70% | Already issued |
| General Public (Including Nepalese citizens working abroad) | 9,600,000.00 | 960,000,000.00 | 30% | To be issued |
Uses of Funds:
| S. No. | Particulars | Amount |
|---|---|---|
| 1 | Government Bond | Rs. 10.58 Crores |
| 2 | Commercial Fixed Deposit | Rs. 1.16 Arba |
| 3 | Development Bank Fixed Deposit | Rs. 31.74 Crores |
| 4 | Other Fixed Deposit | Rs. 21.16 Crores |
| 5 | IPO and Corporate Debentures | Rs. 31.74 Crores |
| 6 | Interest Receiving Deposits | Rs. 11.13 Crores |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Anuj Keyal | Chairman |
| Mr. Kiran KC | Director |
| Mr. Narayan Roongta | Director |
| Mr. Shashank Agrawal | Director |
| Mrs. Neetu Keyal | Independent Director |
Financial Highlights:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/080 (Q4) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital ('000) | 1,400,000.00 | 1,400,000.00 | 1,615,290.00 | 2,240,000.00 | 2,240,000.00 | 5,000,000.00 | 5,000,000.00 |
| Share Premium ('000) | - | - | - | - | - | 1,276,680.00 | 1,276,680.00 |
| Reserve & Surplus ('000) | 223,321.26 | 311,492.77 | 395,401.09 | 811,067.73 | 991,310.92 | 898,397.68 | 1,709,959.95 |
| Contingent Fund ('000) | 25,516.76 | 35,062.65 | 46,577.88 | 91,029.75 | 115,751.86 | 198,483.87 | 295,124.29 |
| Accumulated Fund ('000) | - | - | - | - | - | - | - |
| Other Reserves ('000) | 8,126.40 | 7,282.24 | 125,447.30 | 8,200.01 | 128,229.82 | 164,433.65 | 152,408.36 |
| Net Premium ('000) | 1,093,832.56 | 1,838,561.64 | 2,464,715.50 | 2,897,282.68 | 2,974,012.48 | 3,601,947.44 | 4,324,388.16 |
| Net Profit ('000) | 91,308.38 | 96,235.87 | 220,130.58 | 444,518.66 | 691,739.75 | 827,320.12 | 966,404.18 |
| Earnings per share (Rs.) | 6.52 | 6.87 | 15.72 | 19.84 | 30.88 | 16.55 | 19.33 |
Credit Rating:
CRNL has assigned a grading of ‘CARE-NP IPO Grade 4’ to the proposed Initial Public Offer (IPO) of Sun Nepal Life Insurance Company Limited, indicating Below Average Fundamentals.
Key Rating Strengths:
- Experienced board and management team coupled with being part of a strong promoter group.
- Moderate financial risk profile.
- Adequate geographical coverage through branches and sub-branches.
- Adequate reinsurance arrangement.
- Good assets quality of investment book.
- Improving trend in solvency ratio.
Key Rating Weaknesses:
- Short track record and competition from other insurance companies coupled with a relatively small market share in the life insurance industry.
- Increased combined ratio.
- Exposure to Regulatory Risk.
