10% Prabhu Bank Debenture 2084 opens for application; Find out necessary information before investing

Prabhu Bank Limited (PRVU) is an ‘A’ class financial institution licensed from the Nepal Rastra Bank (NRB). The Bank has gone through the various phases of its growth trajectory over a short period of its existence. Growth of Prabhu Bank was phenomenal, especially after merger of Grand Bank Nepal Limited, Kist Bank Ltd, Prabhu Bikash Bank Ltd, Gaurishankar Development Bank Ltd and Zenith Finance Ltd in, 2016, attaining the status of “A” class financial institution licensed and regulated by the central bank of Nepal, Nepal Rastra Bank. The current Shareholding pattern of the Bank constitutes of Promoters holding 51% and 49% by General Public as per FY2019.

About the Issue:

Prabhu Bank Limited is issuing “10% Prabhu Bank Debenture 2084” worth 2 Arba from Shawan-19, 2077. The early closing date of the issue is on Shrawan-23, 2077. If the issue is not subscribed till Shrawan-23 then the issue will be further extended to Bhadra-05, 2077.

Out of total offered 2,000,000 units; 60% i.e. 1,200,000 units is allocated for different institutions through private placements and rest of the issue i.e. 40% i.e. 800,000 units is allocated for the general public.

Applications can be placed for a minimum of 25 units and a maximum of 300,000 units.

Nabil Investment Banking Limited has been appointed as the issue manager for the debenture issue.

Allocation of Debenture Issue:

Care Rating:

CARE Ratings Nepal Limited (CRNL) has assigned a ‘CARE-NP BBB’ rating to the new proposed Debenture “Prabhu Bank Debenture 2084” issue of Prabhu Bank Limited. The instrument with this rating is considered to have a moderate degree of safety regarding timely servicing of financial obligation, in Nepal. Such instruments carry moderate credit risk.

Key Grading Strengths

• Experienced promoters and management team
• Comfortable CASA ratio with a lower cost of deposits as compared to industry
• Diversified and geographical coverage through branches
• Consistent growth in Loans and Advances and Deposits
• Considerable growth in total income and net profit over the period
• Moderate liquidity profile
• Diversified sector-wise loan portfolio with regulatory compliance
• Diversified Investment portfolio

(Source: https://careratingsnepal.com/)

Shareholding Structure:

Financial Highlights

*2076/2077 report is presented from Q3 report, 2076/2077

Conclusion:

Bonds/Debenture is one of the safe investment vehicles for any risk-avert investors. Since the Interest rates are low for A-class financial institutions on fixed deposit schemes compared to previous quarters; around 7%. With a 10% risk-free rate of return, it might be a good investment vehicle for any risk-avert investors. So, with all the provided information, will you be applying for the issue.

How to apply?

You can apply for the issue in the following way

1. First and foremost, a general investor needs to have a DMAT account. If you don’t have a DMAT account, you can go to any Merchant bank or broker office and have their account open.

2. After opening a DMAT account you have to apply for Mero share from the same office where you opened the account. (Mero Share is a software developed by CDS and Clearing Limited (CDSC). It provides you the facility to view their share transaction information in your account online)

(NOTE: if you do not have a Mero Share account, then you can visit your respective bank or the issue manager of the security and fill out the physical form and submit the application)

3. After you have a Mero share account, you need to get a CRN (Customer Reference Number) number. This will allow you to connect your bank account to your Mero share account when you place to apply for the issue.