"12% ICFC Finance Debenture 2083" opens application from Falgun 13, 2076; Find the information you need to make your decision

Sun, Feb 23, 2020 12:38 PM on Bonds & Debentures, Exclusive, Stock Market,
"12% ICFC...

Company profile

ICFC is a national level class “C” finance company incorporated on September 22, 2003 as Investment and Credit Finance Company Limited which was changed to ICFC Finance Ltd. on March 1, 2010. It is licensed by NRB on July 14, 2004 and commenced operation on July 17, 2004. It is one of the leading finance companies in Nepal. In terms of technology, it is using PUMORI PLUS IV software which enables to provide real-time services to the consumer across all branches. It has total assets size of Rs 14,439 Mn at the end of Q1FY20 which grew by 31.59% over FY19. At the end of Q1FY20, it has Rs 882 Mn paid-up capital which is distributed among promoters and public shareholders in the ratio of 51:49 and the shares are listed in Nepal Stock Exchange Ltd. (Rs 1,367 Mn market capitalization as of November 27, 2019). Mr. Purshottam Poudyal (6.35%), United Distributor Nepal P. Ltd. (3.79%), and Mr. Sushil Kumar Pant (3.62%) are major promoter shareholders of the company.

Objective

About the issue

ICFC Finance Limited (ICFC) is issuing a total of 2 Lakh units of debentures at par value of Rs.1000 per unit. The issue will open from Falgun 13, 2076 to Falgun 16, 2076. In case of under subscription, the issue will be extended till Falgun 27, 2076.

The total value of "12% ICFC Finance Debenture 2083" is Rs.20 Crore and will provide 12% interest. The debentures will mature in 7 years i.e. 2083. Out of the total units, 80,000 units (40% of the issue) is for the general public while 120,000 units (60% of the issue) will be privately placed. Similarly, 5% of debenture issued for the general public i.e 4,000 units is reserved for Mutual Funds.

Global IME Capital Limited has been appointed as the issue manager.

Interested applicants can apply for a minimum of 25 units or a maximum of 76,000 units.

Capital structure

Shareholding structure

Primary shareholders

Board of Directors

Management Team

*There are 153 employees in total.

Rating

CARE Ratings Nepal (CRNL) has assigned Issuer Rating of CARE-NP BBB- (Is) to ICFC Finance Limited (ICFC). CRNL has also reaffirmed rating of CARE- NP BBB- assigned to Subordinated Debenture “12% ICFC Finance Ltd. Debenture 2083”. Issuers with this rating are considered to offer a moderate degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry moderate credit risk. 

 Key Rating Strength

  • Long track record of operation with an experienced board and management team
  • Considerable growth in loans & advances and deposits over the period
  • Moderate capital adequacy level
  • Good asset quality, however, slightly deteriorated in Q1FY20
  • Diversified sector-wise credit portfolio distribution
  • Moderate concentration over top 20 depositors
  • Healthy financial performance, however, volatile over the period
  • Comfortable liquidity profile

Key Rating Weaknesses

  • Low level of CASA declining over the period
  • Geographical concentration of business
  • High concentration over top 20 borrowers, however, decreased in Q1FY20
  • Significant decrease in fair value of an investment over cost price despite diversified investment portfolio
  • Exposure to regulatory risks related to the Finance industry
  • Competition from other Finance Companies and Banks

Source: https://careratingsnepal.com/

Financial indicators

Market share

Source: Company Prospectus and CARE Nepal rating report