ICRA Nepal assigns Grade 3+ to the upcoming FPO of Nepal Life Insurance Co. Limited

ICRA Nepal has assigned an “[ICRANP] IPO Grade 3+” to the upcoming FPO of Nepal Life Insurance Company Limited (NLIC), indicating “average” fundamentals to the proposed FPO. As per ICRA Nepal, the average fundamental grading considers NLIC’s established track record, healthy market share, and a deep franchisee network. The grading also takes into consideration the diverse and large reinsurance arrangements that incorporates adequate catastrophe coverage. ICRA Nepal has also taken note of the negligible impact of the April 2015 earthquake on NLIC’s solvency, profitability and compensation paying ability. However, the grading is constrained by the factors such as absence of institutional promoters, limited diversity in product offerings, and declining investment earnings. ICRA Nepal assigns IPO gradings on a scale of IPO Grade 1 through IPO Grade 5, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor fundamentals. Nepal Life Insurance Company Limited (NLIC) will be issuing 30, 96,429 units shares worth Rs 4.41 arba as a part of Further Public Offering (FPO) from Poush 27, 2073. The FPO is being issued at Rs 1425/unit. The insurance company has a paid up capital of Rs 2.16 arba. After the issuance of the FPO, its paid up capital will reach to Rs 2.47 arba and the promoter-public shareholding ratio will be maintained at 70:30. Reserve will grow by Rs. 4.1 arba.