IPO of CYC Nepal Laghubitta Bittiya Sanstha Opens Today, Here's What You Should Know About the Company
Fri, Apr 15, 2022 10:00 AM on IPO/FPO News, Company Analysis, Latest,
Company Info:
CYC Nepal Laghubitta Bittiya Sanstha Limited is a leading Microfinance in Nepal. It was registered on 11 February 2019 as a public company as a class ‘D’ financial institution with the Nepal Rastra Bank under Act, 2063, and started formal microfinance operation on 15 March 2019. CYC Nepal Laghubitta Bittiya Sanstha previously known as CYC (Chartare Youth Club) is located in Samikshalaya Road Baglung.
Currently, CYC Nepal Laghubitta Bittiya Sanstha is providing microfinance services to more than 59000 deprived households in the Hilly and Mountainous regions of Nepal with a prime focus on low-income households, assets-less, self-employed in the informal sector to uplift their livelihood increasing involvement in economic activities and income-generating activities. Besides all these financial services, it also focuses on social development, cultural promotion, educational development, skill development & many more through its fully operated 73 branch offices which are located All over Nepal.
About the issue:
CYC Nepal Laghubitta Bittiya Sanstha Limited will be issuing 395,336 units worth Rs 3.95 crores as Initial Public Offering to the general public from (Baisakh 02- Baisakh 06, 2079). The early closing date of this issue is on Baisakh 06 and if the issue is not fully subscribed till Baisakh 06, then it can be extended up to Baisakh 16, 2079.
Out of the offered 395,366 units; 0.5% of the issued capital i.e., 6,082 units have been set aside for the employees of the company and 5% of the total offered shares to the general public i.e., 19,766 units have been set aside for the mutual funds. The remaining 3,69,488 units are for the general public.
Global IME Capital Limited has been appointed as the issue manager for the IPO issuance.
Applications can be placed for a minimum of 10 units and a maximum of 1,000 units.
After the issuance of 395,336 units worth Rs 3.95 crore IPO shares the general public i.e., 32.5% of total capital will together raise its paid-up capital to Rs 12.16 crore, and the promoter/public ratio will be 67.5:32.5.
|
CYC Nepal Laghubitta Sanstha Limited |
|||
|---|---|---|---|
|
|
Percentage |
Units |
Amount (Rs.) |
|
Total Capital |
100% |
821,082 |
82,108,200 |
|
Total Issue |
32.50% |
395,336 |
39,533,600 |
|
Employees |
0.5% of Issue Capital |
6,082 |
608,200 |
|
Mutual Fund |
5% of IPO Units |
19,766 |
1,976,600 |
|
Public |
93.46% of IPO Units |
369,488 |
36,948,800 |
|
Issue Manager |
Global IME Capital Limited |
||
|
Issue open date |
Baisakh 02, 2079 |
||
|
Issue closing date (earliest) |
Baisakh 06, 2079 |
||
|
Issue closing date (late) |
Baisakh 16, 2079 |
||
|
Minimum application |
10 |
||
|
Maximum application |
1,000 |
||
Capital Structure
|
Capital Structure |
|
|---|---|
|
Authorized capital |
200,000,000 |
|
Issued capital |
121,641,837 |
|
Current paid-up capital |
82,108,240 |
|
Paid-up capital after issuance of IPO |
121,641,840 |
Shareholding Structure:
|
Shareholding Structure |
||||
|---|---|---|---|---|
|
|
Number of shares |
Amount |
Percentage |
Remarks |
|
Promoters |
821,082 |
82,108,200 |
67.50% |
Already issued |
|
General Public |
395,336 |
39,533,600 |
32.50% |
To be issued |
|
Total |
1,216,418 |
121,641,800 |
100% |
- |
Board of Directors:
|
Board Of Directors |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Padma Nath Sharma |
Chairman |
|
2 |
Dolindra Prasad Sharma |
Director |
|
3 |
Om Prakash Paudel |
Director |
|
4 |
Santosh Kumar Aryal |
Independent Director |
|
5 |
Krishna Bahadur Thapa |
Director |
|
6 |
Sunita Poudel |
Director |
|
7 |
Santosh Rawal |
Director |
Management Team:
|
Management Team |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Dolindra Prasad Sharma |
Managing Director |
|
2 |
Sangita Sharma Poudel |
Administration Department Chief |
|
3 |
Anup Bhari |
Internal Audit Department Chief |
|
4 |
Prakash Sapkota |
HR Department Chief |
|
5 |
Arjun Subedi |
Finance Department Chief |
|
6 |
Mukti Prasad Chief |
Recovery Department Chief |
|
7 |
Suman G.C |
IT Department Chief |
ICRA Rating:
Care Ratings Nepal has assigned the issuer rating of [CARE-NP] BB- (Is) (pronounced Care NP issuer rating double B minus) to CYCN. Issuers with this rating are considered to have a moderate risk of default regarding timely servicing of financial obligations.
Key Strengths:
- Experienced board members and management team
- Adequate level of capitalization however minimum regulatory capital requirement not met
- Low dependence of resource profile on Banks and Financial Institutions' borrowings
- Geographical diversification of business
- Financial performance over the period ended FY20 and FY21
Key Challenges:
- Weak asset quality leading to high GNPL on back of Covid-19 pandemic impact
- Significantly low market share in the industry, albeit moderate growth in business over the period
- high concentration of advances in the agriculture sector
- Presence highly competitive industry
- Inherent risk involved in the microfinance industry
- Exposure to regulations related to the microfinance industry
Financial Highlights:
|
Financial Highlights |
|||||||
|---|---|---|---|---|---|---|---|
|
Particulars |
Actual |
Estimated* |
|||||
|
2075/2076 |
2076/2077 |
2077/2078 |
2078/2079 (Q2) |
2078/2079 |
2079/2080 |
2080/2081 |
|
|
Paid-up capital ('000) |
70,000.00 |
70,000.00 |
82,108.00 |
82,108.00 |
121,642.00 |
121,642.00 |
121,642.00 |
|
Reserves & Surplus ('000) |
113,318.00 |
149,717.00 |
200,638.00 |
257,104.00 |
282,691.00 |
362,878.00 |
456,979.00 |
|
Borrowings ('000) |
5,664.00 |
0.00 |
291,372.00 |
1,019,235.00 |
403,203.00 |
568,243.00 |
812,878.00 |
|
Deposits ('000) |
625,255.00 |
717,618.00 |
881,573.00 |
1,114,174.00 |
1,344,306.00 |
1,604,597.00 |
2,005,747.00 |
|
Loans & Advances ('000) |
887,291.00 |
998,019.00 |
1,633,905.00 |
2,774,056.00 |
2,807,772.00 |
3,191,019.00 |
4,041,744.00 |
|
Net Interest Income ('000) |
39,999.00 |
101,952.00 |
136,493.00 |
104,081.00 |
155,602.00 |
217,216.00 |
246,882.00 |
|
Net Profit ('000) |
13,890.00 |
34,325.00 |
51,513.00 |
58,165.00 |
71,689.00 |
80,189.00 |
94,102.00 |
|
Net worth per share |
261.88 |
313.88 |
344.36 |
413.13 |
332.40 |
398.32 |
475.68 |
|
Earnings per share |
19.84 |
49.04 |
62.74 |
141.68 |
58.93 |
65.92 |
77.36 |
|
Non-performing Loan (%) |
- |
- |
- |
- |
4.45% |
4.44% |
4.40% |
|
Return on Equity (%) |
7.58% |
15.62% |
18.22% |
34.29% |
17.73% |
16.55% |
16.26% |
Conclusion:
Microfinance is one of the most followed sectors by investors in the Nepali Capital Market and one of the reasons is quick-to-market price appreciation. Now, that all the information is available, will you be applying for CYC Nepal Laghubitta Bittiya Sanstha Limited's IPO?
The total shares floated by CYC Nepal Laghubitta Bittiya Sanstha Limited is 395,336 units, of which only 369,488 units are available to the general public after the allocation of shares to staff and mutual fund.
If we see the recently concluded IPO, a total of more than 26 lakh applicants applied for the company IPO and we assume that the same or even more craze prevails in CYC Nepal Laghubitta Bittiya Sanstha Limited's IPO too. Since the 10 kitta rule exists for IPO; 36,948 applicants will be lucky enough to get the shares of CYC Nepal Laghubitta Bittiya Sanstha Limited.
Hence, if the same number of applicants (or more), i.e., 26+ lakhs apply for this issue then there is a high probability of a lottery for 10 units. Since the minimum unit is 10, it is advisable to apply only 10 units in the IPO issue of CYC Nepal Laghubitta Bittiya Sanstha Limited.
