ICRA Nepal has reaffirmed the FMQR of [ICRANP] AMC Quality 3 (AMC 3; pronounced ICRA NP asset management company quality three) assigned to Laxmi Capital Market Limited (LCML or the company). The rating indicates adequate assurance on management quality.
- Strong ownership profile
- Fair track record in fund management with modest fund performance
- Experienced fund supervisors
- Regulatory changes likely to bring in new sector scrips and hence increase market depth
- Sectoral concentration risks and evolving risk management practices
- MF industry in developing stage
- Limited investment diversification avenues so far
- Low attraction of MF schemes among investors
About the company
Incorporated in December 2011, Laxmi Capital Market Limited (LCML) is a wholly-owned subsidiary of Laxmi Bank Limited. LCML has a mutual fund depository’s license in addition to a fund manager’s license from the Securities Board of Nepal (SEBON), as per the Mutual Fund Regulation, 2010. It currently acts in both capacities for its two close-ended MF schemes viz. LVF 1 and LEMF. The company is licensed by SEBON to work as an investment banker (including services like asset management services, private placement, portfolio management, depository participant, etc) and as a merchant banker (including services like issue management, share registrar, underwriting, etc). LCML reported a net profit of ~NPR 32 million in FY2019 (YoY growth of ~2%) on an asset base of NPR 306 million as of mid-July 2019.