IPO of Citizen Life Insurance Company Opens From Today; A Thorough Look Into Company Performance and Vital Fundamentals

Fri, Sep 1, 2023 8:00 AM on IPO/FPO News, Company Analysis, Latest,

Company Profile:

Citizen Life Insurance Company Limited is a public limited life insurance company (LIC), licensed by the Insurance Board in August 2017 and operating since October 2017. Its head office is in Teku, Kathmandu. The company has been established with Nepalese capital by its promoters, who include the media industry (Kantipur Publications Pvt. Ltd.), Nepalese BFIs, merchant bankers, investment management companies, insurance companies, and high net-worth individuals.

About the issue:

Citizen Life Insurance Company Limited is opening the issue of 90,00,000 unit shares to the general public from today i.e. on 15th Bhadra, 2080. The early closing date of this issue is on 19th Bhadra and if the issue is not fully subscribed, it can be extended up to 29th Bhadra, 2080.

The issued capital of the life insurance company is Rs. 3.75 Arba of which 30% i.e. 1,12,50,000 unit shares will be issued to the public (Nepalese citizens working abroad and the general public). Out of this total issue, 10% i.e. 11,25,000 unit shares were issued to Nepalese citizens working abroad, whereas 5% i.e. 562,500 units have been set aside for the employees of the company and 5% of the total offered shares i.e. 562,500 units have been set aside for the mutual funds. The remaining 90,00,000 units will be issued to the general public from today.

The shares will be issued for Rs. 244 per share (Rs 100 face value + Rs 144 premium price) to the general public and for the employees of the company at a par value of Rs. 100.

NIMB Ace Capital has been appointed as the issue manager. The IPO issue will raise a total of Rs. 2.66 Arba for the company. Out of this Rs 1.53 Arba will be the premium amount and the rest will be added to the paid-up capital.

Click here for the offer letter

Citizens Life Insurance Company Limited
Particulars Percentage Units Amount
Total Capital 100%   37,500,000.00    3,750,000,000.00
Total Issue (General Public) 24%      9,000,000.00        900,000,000.00
Issue Manager NIMB Ace Capital    
Issue Open Date 15th Bhadra    
Issue Closing Date (earliest) 19th Bhadra    
Issue Late Closing Date 29th Bhadra    
Minimum Application 10    
Maximum Application 1,500,000    

Capital Structure:

Authorized Capital          5,000,000,000.00
Issued Capital          5,000,000,000.00
Current Paid-Up Capital          2,325,000,000.00
Capital after IPO Issuance           3,750,000,000.00

Shareholding Structure:

  Number of Shares Amount Percentage Remarks
Promoters Shareholders             23,250,000.00          2,325,000,000.00 70% Already issued
General Public (Including Nepalese citizens working abroad)             11,250,000.00          1,125,000,000.00 30% To be issued

Board of Directors:

Name  Position
Mr. Pradeep Jung Pandey  Chairman

Mr. Sumit Kumar Agrawal
Mr. Manoj Karki Director
Mr. Mahesh Swar Director
Ms. Dawa Futi Sherpa Director
Mr. Abhinav J. B. Rana Director
Mr. Shreeman Karki Independent Director

Financial Highlights:

Financial Highlights
Particulars Actual Estimated
2076/77 2077/78 2078/79 2079/080 (Q1) 2079/80 2080/81 2081/82
Total Paid-Up Capital ('000)            1,750,000.00                  1,750,000.00     1,750,000.00      2,325,000.00       3,750,000.00       5,000,000.00         5,000,000.00
Share Premium ('000)                                 -                                          -                            -              13,037.00       1,552,037.00          302,037.00             302,037.00
Reserve & Surplus ('000)                                 -                                          -                            -                              -                              -                              -                                -  
Contingent Fund ('000)                  59,596.00                        90,141.00         125,751.00          143,801.00           186,912.00          272,239.00             364,114.00
Accumulated Fund ('000)               317,105.00                      314,213.00         477,196.00          641,110.00           817,470.00       1,422,037.00         2,034,431.00
Other Reserves ('000)               228,206.00                      424,657.00         664,659.00          639,100.00           860,748.00       1,024,247.00         1,238,812.00
Net Premium ('000)            1,846,222.00                  3,417,114.00     4,839,406.00      4,018,348.00       6,250,606.00       8,687,173.00       11,439,730.00
Net Profit ('000)               239,044.00                      300,506.00         376,071.00          180,498.00           611,614.00          835,269.00             918,751.00
Earnings per share (Rs.) 15.37                                 17.17                   21.49                       6.88                     16.31                     17.07                       18.38

ICRA Rating Nepal:

ICRA Nepal has upgraded the issuer rating of Citizen Life Insurance Company Limited to [ICRANP-IR] BBB (pronounced ICRA NP Issuer Rating triple B) from [ICRANP-IR] BBB- (pronounced ICRA NP Issuer Rating triple B minus). Such issuers are considered to have a moderate degree of safety regarding the timely servicing of financial obligations.

Key Rating Strengths:

  • Association with strong promoter group experienced board and management team.
  • Moderate financial risk profile supported by the growing scale.
  • Adequate geographical coverage through branches and sub-branches.
  • Adequate reserve and reinsurance arrangement.
  • Improving trend in solvency ratio in FY22.
  • Good assets quality of investment book.

Key Rating Weaknesses:

  • Short track record and competition from other insurance companies coupled with a relatively small market share in the life insurance industry.
  • Deterioration in combined ratio marked by an increase in claims ratio.
  • Exposure to Regulatory Risk.