IPO Information of JEBILS FINANCE LIMITED

JEBIL’S FINANCE LIMITED

• Initial Public Offering (IPO) Name: Jebil’s Finance Limited
• Issued Units: 0.98 million
• Per Unit Cost: NPR 100
• IPO Size: NPR 98 million
• Units Allotted for Staff: 19.6 thousand
• Size Allotted for Staff: NPR 1.96 million
• Units Allotted for Mutual Fund: 49 thousand
• Size Allotted for Mutual Fund: NPR 4.9 million
• Units Allotted for General Public: 0.9114 million
• Size Allotted for General Public: NPR 91.14 million
• Opening Date: 2069/12/02
• Closing Date (Minimum): 2069/12/06
• Closing Date (Maximum): 2069/12/16
• Minimum Investment Units :  50 units
• Minimum Investment Amount:  NPR 5000
• Maximum Investment Units : 0.1 million
• Maximum Investment Amount: NPR 10 million

Note: IPO applied for more than 50 units should be divisible by 10 and when applied for more than or equal to Rs 50,000 the payment should be made through account payee check.

Issue Manager: NCM Merchant Banking Limited

                       Citizen Investment Trust

Introduction of Jebil’s Finance Limited

Jebil’s Finance Limited (Jebil’s) was established under the Company Act, 2063 and Bank and Financial Institution Act, 2063. It commenced its operation as one of the financial institutions of Nepal from 2066/07/11 after receiving a license from Nepal Rastra Bank as on 2066/06/29. It is founded by promoters with strong background in Banking Profession, Managers, Auditors, Businessmen, Industrialists, Doctors, Lawyers and Engineers  who have come together to build a path for the economic development of the country. The Bank’s vision is to emerge as most preferred financial institutions of Nepal.

The Bank has been registered with authorized capital of NPR 400 million and currently holds issued capital of NPR 200 million and paid up capital of NPR 102 million. The Bank firmly believes in creating value for its shareholders and depositors through standard service facilities and protecting their interest.

The company registered office is situated in Kathmandu Metropolitan City, Ward No. 24, New Road, Kathmandu which is also the Head office of the Bank. Currently, the company is providing its services through its head office only. But due to competition  among financial institutions to attract customer by providing different banking services, the company has started an ATM service from 2068/05/08 to enhance its services to the customers. Besides this, the company has integrated withmore than 80 SCT member Bank & Financial Institution with more than 850 ATM terminal and more than 1340 POS terminal within Nepal.

Major shareholders of Jebil’s Finance Limited as per the Prospectus (Holding more than 1%)

Board of Directors of Jebil’s Finance Limited

Mr. Binod Kumar Manandhar, Chairman

Qualification: BBA Graduate

Work Experience: Associated with Bodhi Travels & Tours Pvt. Ltd as a Managing Director. He has an experience as director from 2001 A.D. to 2004 A.D. in Siddhartha Finance Limited. Currently also involved with Muktinath Airlines.

Mr.  Laxmi Lal Nakarmi, Managing Director

Qualification: Master of Business Administration (MBA)

Work Experience: Has more than 15 years of experience in the Financial Sector. He was associated to Dome Consultancy Pvt. Ltd. as Account Officer from 2046 B.S. to 2052 B.S.  and in Nepal Finance Limited as head of different managerial position from 2052 B.S. to 2062 B.S. He is currently also associated with Jebil's International Pvt. Ltd., Ekita Int’l School.

Mr. Sagar Man Tuladhar, Director

Qualification: B. Com Graduate

Work Experience: He was involved in teaching profession from 2022 B.S. to 2061 B.S.  He has associated with the Prabhat Secondary School & Kesh Chandra Primary School in managerial position.

Mr. Gopal Rajbhandary, Director

Qualification: BBS Graduate

Work Experience: He is associated with Peak Promotion Trading Pvt. Ltd. as Manager (Accounts) from 2001 A.D. He was involved with Intensive International Academy  as a consultant (Accounts) from 2006 A.D. to 2010 A.D.

Mr. Binod Shrestha,  Director

Qualification: BBA Graduate

Work Experience: He is associated with Jebil's International Pvt. Ltd., Ekita Int’l School, Travels Housing USA Pvt. Ltd. and Lotus Footware as Director and is proprietor of Doniv Production.

Management Team of Jebil’s Finance Limited

Mr.  Laxmi Lal Nakarmi, (Managing Director)

Qualification:  Master of Business Administration

Work Experience: He has more than fifteen years service experience in the financial sector, also holds knowledge of various areas of the financial sector. He was associated to Dome Consultancy Pvt. Ltd. as Account Officer from 2046 B.S. to 2052 B.S.  and in Nepal Finance Limited as head of different managerial position from 2052 B.S. to 2062 B.S. He is currently also associated with Jebil's International Pvt. Ltd., Ekita Int’l School.

Mr. Jitendra Lal Nakarmi (Chief Operating Officer)

Qualification: B. Com Graduate

Work Experience: Started his career from Machan Wildlife Resort Pvt. Ltd. as Chief Accountant from 2049 B.S. to 2060 B.S.. He was also associated with Jebil’s Cooperative Ltd. as Chairman from 2047 B.S. to 2060 B.S. and also as Manager at Jay GuruGanesh Steel Furniture from 2047 B.S. to 2049 B.S.

Mr. Sangam Rajbhandary (Manager)

Qualification: B. Com Graduate

Work Experience: Has sound experience in various areas of the financial sector. He has an expertise himself in various financial areas within his 15 years of service at Nepal Finance Limited.

Mr. Yugesh Shrestha (Assistant Manger)

Qualification: MBS Graduate

Work Experience: Has 7 years of experience of financial service starting from Nepal Finance Limited and then to Nepal SBI Bank Limited. 

Mr. Ajesh Shakya (Senior Officer)

Qualification: BBS Graduate

Work Experience: Earned good knowledge on Credit and Operation Management during his 8 years experience in the financial sector including Nepal Finance Limited, Sagarmatha Merchant Banking & Finance Limited and Zenith Finance Limited.

Capital Structure

FINANCIAL HIGHLIGHT OF THE BANK

                                                                                              Figure in Rs “000”

Looking at the Jebil’s capital structure, the company currently holds 51% paid up of the issued capital. With the initial public offering (IPO), the company plans to par the capital structure with that of issued capital. Similarly, observing reserve and surplus of the company, it has made a hefty jump of 103.65% in reserve and surplus in the FY 2068/69 compared to the last FY 2067/68.

Comparing the current second quarter report to that of previous quarters of past two fiscal years, it can be observed that the company is in the path of making higher growth than that of preceding fiscal years. With the healthy growth in its reserve there is a chances of cash dividend during the frist year after the issue of IPO in the future date.

The above mentioned figures of CD ratio of the company is according to the NRB directives. As per the NRB directives, the financial institutions are required to maintain a 80% CD ratio but the company hasn’t been able to fully utilize its resources as per the set benchmark.  Looking at the loan portfolio of the company, they have lowered their exposure to the real estate loan apart from home loans. Currently, their exposure to real estate loan is nil whereas they have increased their exposure in home loans as it stands at 20.89% from 9.05% of the preceding second quarter of the FY 2068/69. The precautions they have taken against the greater exposure to real estate loan and lack of other investment opportunity in the country due to the sluggish economic condition primarily reflex in the company’s inability to meet the NRB’s set benchmarks.

From the table we can see that the bank was able to sustain similar growth in deposit in the past two fiscal years whereas the growth in loan and advance fell from 42.79% to 27.32% in the preceding fiscal year. Though the company has increased its exposure to other areas of its loan portfolio, the decrease in its real estate exposure and the increasing loan amount base (see the loan and advance in Rs in above table) have mainly limited its growth in loans.

However, looking at the second quarter report of this FY 2069/70, the bank has maintained similar growth in both deposits and loans & advances. Compared to the second quarter of the prior FY 2068/69, the company has increased its loan exposure in home loans and margin type loans by more than 100% , and  more than 50% on term loan and other loan, which have helped the company to come par with the growth of deposit.

In the past FY 2068/69, the company has maintained a lower growth in operating profit before provision than that of FY 2067/68. The decline was mainly because of the increase in the interest expenses as it inclined by more than 4% (i.e. From 59.32% to 63.45%) than the prior corresponding period.

However, looking at the current second quarter report, the bank has sustained negative growth in its operating profit before provision. But compared to the corresponding second quarter of FY 2068/69, the company is in a better position. Though the company has maintained a steady growth in its interest income, the increasing interest expense of the company has adversely effected the company’s operating profit before provision.

Now if we look at the net write back, the bank has not been able to make a positive write back in its short history. But, looking at the net write back/loan of the past two fiscal years, the bank has lowered its exposure from one percent to lower level. However, with the increasing loan base of the company its net writes back/ loan figure is slowly creeping up which signals towards the deteriorating loan portfolio of the company. NPL of 2.96% during the FY 2068/69 is mainly a worrying sign for a newer company.

Looking at the net profit of the company, in the past FY 2068/69 it has increased than the preceding FY 2067/68, but the growth in the net profit has taken toll from the increase of NPL. Whereas going through the second quarter reports, the company has sustained positive growth in this quarter. If we observe the company’s operating profit before provision, it is less than that of the corresponding quarter figure but the company still has managed to make a 56.47% growth in the net profit this quarter, this is mainly because of the income from non operating income , which is like selling an assets, investment or from the dividend, worth NPR 1.94 million. So, it would be hard to conclude that the company shall maintain the growth in its net profit in the upcoming years, if the company doesn’t lower its NPL.

If we look at the Net Worth, EPS, ROA and ROE of the past two fiscal years, the company’s Net worth has grown steadily from the date of establishment. Now, looking at the comparison of the second quarters’ data, all the above mentioned indicators have also incremented in the current quarter but it should be kept in mind that the increase in net profit through non operating income has only made this possible in this quarter.

Similarly, comparing the second quarter of FY 2069/70 and FY 2068/69 to that of FY 2067/68, we can see that EPS, ROA and ROE were in a better position. The increase in the NPL has deteriorated the financial indicators of the company and has not been able to par with that of company’s previous situation, when it NPL was below one percent.

Looking at all the major financial highlights, it comes to light that despite the company attempt to lower its risk through minimizing the real estate loans, the company hasn’t been able to offset the risk from other areas of the loan portfolio which has resulted in the NPL over 2%. This outcome has ultimately limited the company’s growth. However, the company has managed to tackle the loss from the NPL through other operating and non operating activities which has eventually kept the company from suffering loss.

COMPANY’S WEBSITE: http://www.jebils.com

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