Things to Know Before Applying for IPO of Aviyan Laghubitta (AVI); IPO Opens Today For General Public
Wed, Aug 3, 2022 7:00 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Incorporated in April 2019, the company started its operation in November 2019 as a licensed national level class D microfinance institution. AVI is promoted by two commercial banks (Mega Bank and Kumari Bank Limited with holdings of ~16.4% each) and 246 individual promoters. Mr. Laxmishwor Devkota is the Chief Executive Officer of the company. The registered and corporate office of ALBSL is in Panauti-5 Kavre, Nepal.
About the issue:
Aviyan Laghubitta Bittiya Sanstha Limited (AVI) will be issuing its IPO to the general public from today i.e. 18th Shrawan and close on 22nd Shrawan, 2079. If unsubscribed, the issue can be extended up to 1st Bhadra.
9,75,000 unit shares worth Rs. 9.75 crores will be issued at a par value of Rs. 100 per share. This is 39% of the company's issued capital. Out of the offered 9,75,000 units; 0.5% of the total capital i.e. 12,500 units have been set aside for the employees of the company and 5% of the total offered shares to the general public i.e. 48,750 units have been set aside for the mutual funds. The remaining 9,13,750 units are for the general public. The total capital after the IPO will be Rs 25 crore of the company.
Applications can be placed for a minimum of 10 units and a maximum of 3000 units. Muktinath Capital Limited has been appointed as the issue manager for the IPO issuance.
| Aviyan Laghubitta Bittiya Sanstha Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 2,500,000.00 | 250,000,000.00 |
| Total Issue (General Public) | 39.00% | 975,000 | 97,500,000.00 |
| Issue Manager | Muktinath Capital Limited | ||
| Issue Open Date | Shrawan 18 | ||
| Issue Closing Date (earliest) | Shrawan 22 | ||
| Issue Closing Date (Late) | Bhadra 01 | ||
| Minimum Application | 10 | ||
| Maximum Application | 3,000 | ||
Capital Structure:
| Authorized Capital | 60,00,00,000 |
| Issued Capital | 25,00,00,000 |
| Current Paid-Up Capital | 15,25,00,000 |
| Capital after IPO Issuance | 25,00,00,000 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 1,525,000.00 | 152,500,000.00 | 61.00% | Already issued |
| General Public | 975,000.00 | 97,500,000.00 | 39.00% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Baburam Thapa | Chairman |
| Mr. Bhojraj Bhattarai | Director |
| Mr. Bharati Pathak | Director |
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) | 152,500.00 | 152,500.00 | 152,500.00 | 152,500.00 | 250,000.00 | 250,000.00 | 250,000.00 |
| Reserve & Surplus ('000) | (925.19) | (9,528.52) | 8,167.59 | 19,288.92 | 37,616.45 | 85,875.85 | 176,265.73 |
| Debt ('000) | - | - | - | - | - | - | - |
| Revenue ('000) | - | - | - | - | - | - | - |
| Interest Expenses ('000) | - | 1,429.31 | 45,941.50 | 121,111.18 | 71,664.50 | 94,191.18 | 116,139.82 |
| Net Profit ('0000) | (925.19) | (8,603.33) | 17,696.11 | 11,183.28 | 29,448.95 | 48,259.30 | 90,389.87 |
| Earnings per share (Rs.) | (6.06) | (5.64) | 11.60 | 7.33 | 11.78 | 19.30 | 36.16 |
| Net worth per share (Rs.) | 99.39 | 93.75 | 105.36 | 112.64 | 115.05 | 134.35 | 170.51 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | (0.06) | (0.60) | 1.10 | 0.65 | 1.02 | 1.44 | 2.12 |
ICRA Ratings:
ICRA Nepal has assigned the issuer rating of [ICRANP-IR] BB- (pronounced ICRA NP Issuer Rating Double B minus) to Aviyan Laghubitta Bittiya Sanstha Limited (AVI). Issuers with this rating are considered to have a moderate risk of default regarding timely servicing of financial obligations.
Key Strengths:
- Institutional promoters and experienced management team.
- Adequate network base supported business growth.
Key Challenges:
- Limited track record of operation with relatively small operational scale.
- Moderate asset quality; high delinquencies remain a concern.
- Funding profile dependent on external borrowings.
- Profitability profile subdued by increased borrowing interest rates and credit cost.
- Low penetration of credit bureau in Nepalese MFI sector; risk of overleveraged borrowers remains high.
- Regulatory risk.
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 Aviyan Laghubitta Bittiya Sanstha Limited, the issue will be oversubscribed. Since the "10 kitta rule" still holds true for IPO; 91,375 applicants will be lucky enough to get the 10 unit shares ofAviyan Laghubitta Bittiya Sanstha Limited. So, it is advisable to apply only 10 units.
