IPO of Infinity Laghubitta Bittiya Sanstha opens from Jestha 13; See the detailed information of company before investing

Company profile

Infinity Laghubitta Bittiya Sanstha started its operation from Magh 07, 2073 as a Class D financial institution licensed by Nepal Ratra Bank. It's registered head office is located at Gandaki Province, Nawalpur District, Gaidakot 01, Kaligandaki Chowk. The company's main business is providing microfinance loans based on the Joint Liability Group (JLG) model.

It has five experienced members on board led by Mr. Khemraj Nepal who has 29 years of experience and was retired as Secretary of Nepal Government is the chairman of the company. The company is promoted by 88 individual promoters who belong from diverse background. The day to day operations of the company are headed by Mr. Prabin Kumar Lama who is the chief executive officer of the company. 

The microfinance currently has a network of 42 branches being served by a total of 184 employees.

Objective of the issue

About the issue

Infinity Laghubitta Bittiya Sanstha Limited is issuing 6,74,300 units ordinary shares worth Rs 6.74 crore to the general public from Jestha 13, 2076. The early closing date of this IPO issue is on Jestha 16, 2076 and if the issue is not subscribed till Jestha 16 then this issue can be extended upto Ashad 10, 2076.

Out of the offered 6,74,000 units; 33,700 units have been allotted for the mutual funds. The remaining 6,40,300 units (including 10,370 set aside for employees of the company) for the general public.

Applications can be place for minimum 10 units and maximum 3,370 units. Application can be placed from the financial institutions providing C-ASBA facility or through Meroshare.

Civil Capital Market Limited has been appointed as the issue manager for the IPO issuance.

After the IPO issue, company paid up capital will be Rs 20.74 crore and promoter and public shareholding ratio will be 67.50:32.50.

Care Rating Nepal Limited has reaffirmed grading of „CARE-NP IPO Grade 4‟ to the proposed Initial Public Offer (IPO) of Infinity Laghubitta Bittiya Sanstha Ltd.

Infinity Laghubitta earned Rs 2.19 crore till Q3 of the current FY. 

Capital structure

Shareholding composition

Board of directors

Management team

Credit rating

CARE Nepal has assigned grading of "CARE-NP IPO Grade 4‟ to the proposed Initial Public Offer (IPO) of Infinity Laghubitta Bittiya Sanstha Ltd. (ILBSL). Rating indicates below average fundamentals. ILBSL proposes IPO issue of 674,000 equity shares of face value of Rs.100 each at par aggregating Rs.67.40 Million.

Key Grading Weakness

  • Short track record of operations, however, adequate geographical reach in its area of operation
  • Concentrated resource profile with high dependence on Banks and Financial Institution (BFIs) borrowings
  • Increasing percentage of Non-Performing loan (NPLs) to total loan ratio
  • Concentrated product portfolio distribution, however made some efforts to diversify from last year
  • Exposure to regulatory risks related to microfinance industry
  • Inherent risk involved in the microfinance business including socio political interventions

Key Grading Strengths 

  • Ability of the company to increase its scale of operations
  • Improved financial performance during H1FY19 (UA)
  • Comfortable Capital Adequacy ratio (CAR)
  • Comfortable Liquidity Profile

Source: CARE Nepal

Financial performance

Source: Company prospectus and CARE Nepal