IPO of Sanima Life Insurance Opening From Today; A Thorough Look Into Company Performance and Vital Fundamentals
Wed, Aug 4, 2021 4:58 AM on IPO/FPO News, Company Analysis, Stock Market, Exclusive,
Company Information:
Sanima Life Insurance Company Limited was incorporated under the Companies Act, 2063 on 2064/08/13. Beema Samiti assigned the operating license to the company on 2074/05/07 as per Sub-clause 3 of Clause 10 of Insurance Act, 2049 and Sub-rule 1 of Rule 8 of Insurance Regulations, 2049 to conduct the business of Life Insurance and the company started its commercial operations on 2074/08/22. Promoted by Non-Residents Nepalese (NRN), who have an investment in Finance, Banking, Hydropower, and Tourism, etc in Nepal, Sanima Life Insurance aims to be a trusted name in the Life Insurance Sector of Nepal. Sanima Bank is the major promoter of Sanima Life Insurance Limited.
About the Issue:
Sanima Life Insurance Company Limited issuing 6,000,000 units of ordinary shares worth Rs. 60 crores to the general public from Shrawan 20, 2078. The early closing date of this IPO issue is on Shrawan 24, 2078 and if the issue is not subscribed till Shrawan 24 then this issue can be extended up to Bhadra 02, 2078.
Out of offered 6,000,000 units; 5% of the issued capital i.e., 300,000 units have been allotted for the employees of the company and 5% of the total capital has been allotted for the mutual funds. The remaining 5,400,000 units are for the general public.
Applications can be placed for a minimum of 10 units and a maximum of 30,000 units.
Prabhu Capital Limited has been appointed as the issue manager for the IPO issuance.
The paid-up capital will reach Rs. 2 Arba after the issuance of the public shares. After the IPO issue; public holding will be 30% and promoters holding will be 70%.
|
Sanima Life Insurance Company Limited |
|||
|---|---|---|---|
|
|
Percentage |
Units |
Amount (Rs.) |
|
Total Capital |
100% |
20,000,000 |
2,000,000,000 |
|
Total Issue |
30% |
6,000,000 |
600,000,000 |
|
Employees |
5% of IPO Shares |
300,000 |
30,000,000 |
|
Mutual Fund |
5% of IPO Shares |
300,000 |
30,000,000 |
|
Public |
90% of IPO Shares |
5,400,000 |
540,000,000 |
|
Issue Manager |
Prabhu Capital Limited |
||
|
Issue open date |
Shrawan-20, 2078 |
||
|
Issue closing date (earliest) |
Shrawan-24, 2078 |
||
|
Issue closing date (late) |
Bhadra-02, 2078 |
||
|
Minimum application |
10 |
||
|
Maximum application |
30,000 |
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Credit Rating:
Care Ratings Nepal (CRNL) has assigned a ‘CARE-NP BBB- (Is)’ rating to Sanima Life Insurance Limited (SLIL). Issuers with this rating are considered to offer a moderate degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry moderate credit risk.
Key Rating Strengths:
- Strong Promoter group including institutional promoter
- Experienced board and management team
- Moderate financial risk profile and improving the combined ratio
- Moderate solvency profile
- Good assets quality of investment book
- Adequate geographical coverage through branches
Key Rating Weaknesses:
- Short track record and competition from other insurance companies coupled with relatively small
market share in the life insurance industry - Concentration in Endowment policies
(SOURCE: CARE Nepal)
Capital Structure:
|
Capital Structure |
|
|
Authorized capital |
3,000,000,000 |
|
Issued capital |
2,000,000,000 |
|
Current paid-up capital |
1,400,000,000 |
|
Paid-up capital after issuance of IPO |
2,000,000,000 |
Shareholding Structure:
|
Shareholding Structure |
||||
|---|---|---|---|---|
|
|
Number of shares |
Amount |
Percentage |
Remarks |
|
Promoters |
14,000,000 |
1,400,000,000 |
70% |
Already issued |
|
General Public |
6,000,000 |
600,000,000 |
30% |
To be issued |
|
Total |
20,000,000 |
2,000,000,000 |
100% |
- |
Board of Directors:
|
Board Of Directors |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Kumar Prasad Koirala |
Chairman |
|
2 |
Ghanshyam Thapa |
Director |
|
3 |
Dr. Subarna Das Shrestha |
Director |
|
4 |
Buddhi Bishal Ghimire |
Director |
|
5 |
Bharat Bahadur Thapa |
Director |
Management Team:
|
Management Team |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Agam Mukhia |
Chief Executive Officer |
|
2 |
Shiva Ram Timilsina |
General Manager |
|
3 |
Choodamani Chapagain |
Deputy General Manager |
|
4 |
Ganesh Chalagai |
Chief Manager-Marketing |
|
5 |
Aryak Ranjan Baral |
Chief Finance Officer |
|
6 |
Gunaraj Shrestha |
Head-Corporate Business |
Uses of Funds:
|
S. N |
Particulars |
Allocation |
Amount |
|---|---|---|---|
|
1 |
Government Bonds |
25% |
150,000,000 |
|
2 |
Fixed Deposit in Commercial Bank |
40% |
240,000,000 |
|
3 |
Fixed Deposit in Development Bank |
15% |
90,000,000 |
|
4 |
Fixed Deposit in Microfinance Companies |
10% |
60,000,000 |
|
5 |
Investment in Public Limited companies |
10% |
60,000,000 |
|
Total |
100% |
600,000,000 |
|
Since the insurance companies are mandated to deposit 90% or more of their capital, 40% of the total funds will be allocated in fixed deposits in commercial banks (A-class financial institutions), 15% of the funds will be allocated in fixed deposits of development banks (B-class financial institution) whereas 10% of the total fund will be deposited in Microfinance companies (D-class). This makes up 65% of funds directly into the fixed deposit. The remaining 25% is allocated to Government Bonds while 10% is allocated to investment in publicly listed companies.
Financial Highlights:
|
Particulars |
Acutal |
Estimated* |
||||
|---|---|---|---|---|---|---|
|
2074/2075 |
2075/2076 |
2076/2077* |
2077/2078 |
2078/2079 |
2079/2080 |
|
|
Paid-up capital ('000) |
1,400,000.00 |
1,400,000.00 |
1,400,000.00 |
1,400,000.00 |
2,000,000.00 |
2,000,000.00 |
|
Reserves & Surplus ('000) |
-12,408.26 |
42,235.54 |
122,607.78 |
211,014.19 |
391,244.19 |
707,975.88 |
|
Contingent Fund ('000) |
0.00 |
6,937.01 |
13,431.69 |
23,321.71 |
43,347.27 |
78,539.68 |
|
Insurance Fund ('000) |
154,528.41 |
443,641.42 |
950,884.31 |
2,109,739.27 |
3,950,152.58 |
6,822,819.12 |
|
Gross Premium ('000) |
94,535.20 |
444,471.99 |
838,700.00 |
2,082,906.22 |
3,427,809.31 |
5,509,318.95 |
|
Net Premium ('000) |
90,809.75 |
428,707.77 |
821,313.09 |
2,041,456.39 |
3,359,595.91 |
5,399,683.50 |
|
Claim Payment ('000) |
0.00 |
1,434.67 |
7,626.39 |
85,051.79 |
219,401.37 |
438,802.74 |
|
Net Profit ('000) |
-10,608.29 |
54,742.17 |
85,384.37 |
94,249.53 |
195,544.09 |
342,241.50 |
|
Net Premium/Gross Premium (%) |
- |
96.45% |
97.93% |
98.01% |
98.01% |
98.01% |
|
Earnings per share (Rs.) |
-0.76 |
3.91 |
6.10 |
6.73 |
9.78 |
17.11 |
|
Net worth per share (Rs.) |
99.11 |
103.51 |
109.72 |
116.74 |
121.73 |
139.33 |
|
Return on Equity (%) |
-0.76% |
3.78% |
5.56% |
5.77% |
8.03% |
12.28% |
(NOTE: Figures of 2076/2077 are unaudited)
Trends of key Indicators:
- Insurance Fund
- Premium Collection
- Net Profit
- Earnings per share
- Return on Equity
How much to apply?
If we see the recently concluded IPO’s; more than 20 lakh applicants applied for the issue and we assume that the same or even more craze prevails in Sanima Life Insurance Limited’s IPO too. Since the 10 kitta rule exists for IPO; 540,000 applicants will be lucky enough to get the 10 shares of Sanima Life insurance.
To sum up, if the same number of applicants (or more) who applied for previous IPO’s apply for this issue then there is a high probability of getting 10 units through lucky draw. So, it is advisable to apply only 10 units (minimum) in the IPO issue of Sanima Life Insurance Company Limited.
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