Things to Know Before Applying for IPO of Adarsha Laghubitta (ALBS); IPO Opens Today For General Public
Wed, Jun 15, 2022 10:02 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Adarsha Laghubitta Bittiya Sanstha Limited (ALBS) is a “D” class Province Level microfinance institution with the approval of operation in only Bagmati Province through 13 districts. It was incorporated on May 23, 2018, and commenced operations in January 2019. It is promoted by institutions and individuals from different backgrounds and is primarily engaged in providing microfinance loans based on the Joint Liability Group (JLG) model with each group consisting of a minimum of five members.
About the issue:
Adarsha Laghubitta Bittiya Sanstha Limited (ALBS) will be issuing its IPO to the general public from 1st Ashadh and close on 6th Ashadh, 2079. If unsubscribed, the issue can be extended up to 15th Ashadh.
67,000 unit shares worth Rs. 67 lakhs will be issued at a par value of Rs. 100 per share. This is 32.37% of the company's issued capital. Out of the total issue; 0.5% i.e 1,035 unit shares have been allocated to the ordinary shareholders whereas 5% i.e 3,350 unit shares are for mutual funds. The remaining 62,615 unit shares are for the general public. The paid-up capital of the company after the IPO issuance will be Rs. 2.07 crore.
BOK Capital Market has been appointed as the issue manager for the IPO issuance. The interested investors can apply for a minimum of 10 shares to a maximum of 1000 shares.
| Adarsha Laghubitta Bittiya Sanstha Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 2,07,000 | 2,07,00,000 |
| Total Issue (General Public) | 32.37% | 67,000 | 67,00,000 |
| Issue Manager | B.O.K Capital Market | ||
| Issue Open Date | 1st Ashad | ||
| Issue Closing Date (earliest) | 6th Ashad | ||
| Issue Closing Date (Late) | 15th Ashad | ||
| Minimum Application | 10 | ||
| Maximum Application | 1,000 | ||
Capital Structure:
| Authorized Capital | 4,00,00,000 |
| Issued Capital | 2,07,00,000 |
| Current Paid-Up Capital | 1,40,00,000 |
| Capital after IPO Issuance | 2,07,00,000 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 1,40,000 | 1,40,00,000 | 67.63% | Already issued |
| General Public | 67,000 | 67,00,000 | 32.37% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Rajesh Sharma | CEO |
| Mr. Dhurba Kumar Bajimaya | Senior Manager/ Company secretary |
| Mr. Pushpa Raj Dhakal | Senior Manager |
Financial Statement:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2075/76 | 2076/77 | 2077/78 | 2078 (Q3) | 2078/79 | 2079/80 | 2080/81 | |
| Total Paid-Up Capital ('000) | 14,000.00 | 14,000.00 | 14,000.00 | 14,000.00 | 24,426.00 | 28,822.68 | 34,010.76 |
| Reserve & Surplus ('000) | 1,731.72 | 5,577.12 | 6,098.75 | 8,362.92 | 5,578.89 | 5,271.96 | 6,856.05 |
| Debt ('000) | - | - | - | - | - | - | - |
| Revenue ('000) | 1,731.72 | 1,017.34 | 717.93 | 2,164.37 | 3,573.71 | 4,442.92 | 7,231.34 |
| Interest Expenses ('000) | 5,193.00 | 10,491.62 | 11,003.66 | 14,520.87 | 19,853.00 | 24,926.78 | 28,167.65 |
| Net Profit ('0000) | - | - | (195.14) | - | 24.39 | 48.79 | 97.57 |
| Earnings per share (Rs.) | 12.37 | 7.27 | 5.13 | 15.97 | 20.60 | 18.19 | 25.09 |
| Net worth per share (Rs.) | 112.37 | 119.24 | 122.88 | 102.44 | 156.82 | 128.27 | 132.34 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | - | - | (0.10) | - | 0.01 | 0.01 | 0.02 |
CARE Ratings:
CARE Ratings Nepal Limited (CRNL) has assigned rating of ‘CARE-NP B+ (Is)’ to Adarsha Laghubitta Bittiya Sanstha Limited (ALBS). Issuers with this rating are considered to have high risk of default regarding timely servicing of financial obligations.
Key Strengths:
- Experienced board members and management team with backup from the strong institutional promoter.
- Moderate assets quality and liquidity profile.
Key Weaknesses
- The small scale of operations although growing and low profitability margins.
- Geographically concentrated operations.
- High concentration of advances towards the service sector.
- Declining deposit ratio with increase in dependence on Banks & Financial Institutions (BFIs) borrowings.
- Thin capital cushion with the minimum regulatory requirements not being met.
- Low market share in a highly competitive industry.
- The inherent risk is involved in the microfinance industry.
- Exposure to regulatory risks related to the microfinance industry.
How much to apply?
When we observe the current scenario, investors have still shown a high level of confidence in IPO despite declining NEPSE, which is shown by the huge demand in the recently concluded IPO.
When we look at the current trend of IPO in the market, we see that more than 15-16 lakhs of investors have been applying in the recent issue. This shows that, even if a quarter of this number applied for the issue of Adarsha Laghubitta Bittiya Sanstha Limited, the issue will be oversubscribed. Since the "10 kitta rule" still holds true for IPO; 6,261 applicants will be lucky enough to get the 10 unit shares of Adarsha Laghubitta Bittiya Sanstha Limited. So, it is advisable to apply only 10 units.
