ICRA Nepal assigns [ICRANP] IPO Grade 4+ to 20% proposed right shares of Kumari Bank

Tue, Feb 6, 2018 11:11 PM on Latest, Featured, Stock Market,
ICRA Nepal Limited, the only credit rating agency of Nepal licensed by Securities Board of Nepal (SEBON), has assigned issuer rating of [ICRANP] IPO Grade 4+ 20% proposed right shares of Kumari Bank Limited (KBL). As per ICRA Nepal, grading assigned signifies below average fundamentals of the bank. The assigned grading factors in KBL’s adequate track record (since 2001), comfortable capitalization profile, adequate franchise and experienced management team which is expected to support the incremental growth prospects of the bank. The grading remains constrained by bank’s track record of lower than industry average growth rate in the past leading to reduced market share and smaller business volume among similar aged peers; credit portfolio grew by ~14%4 over last five years (ending Jul-17) compared to ~23% growth in the industry. ICRA Nepal assigns IPO grading on a scale of IPO Grade 1 through IPO Grade 5, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor fundamentals. For the grading categories 2, 3 and 4, the sign of + (plus) appended to the grading symbols indicate their relative better position within the grading categories concerned. KBL will be issuing 20% (10:2) right share i.e. 1,19,38,991.65 units to its shareholders of worth Rs 1.19 arba. NIBL Capital Markets Limited has been assigned as its issue manager. KBL  has paid up capital of Rs 5.96 arba with Rs 2.59 arba in reserve. KBL has been seeking approval from SEBON to issue 20% right shares. After issue of 20% right shares, it will reach to Rs 7.15 arba. To meet the capital requirement of Rs 8 arba, it should hike its capital by Rs 85 crore (around 11.87%). KBL had earned Rs 48.02 in the second quarter of the FY 2074/75.