Issue of Sunrise First Mutual Fund opens from Ashwin 08, 2076; Information you need before investing

Tue, Sep 24, 2019 5:26 PM on Mutual Fund, Stock Market,

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Company Profile

The mutual fund scheme “SFMF” is promoted by Sunrise Bank and managed by Sunrise Capital.

Sunrise Bank Limited (SBL) is “A” Class Licensed Institutions from Nepal Rastra Bank (NRB). It was incorporated on October 12, 2007 as 23rd Commercial Bank of Nepal. The bank is promoted by reputed entrepreneurs who are industrialist, businessman, engineers, and prominent person of Nepal. As on July 15, 2017, 51% of the total shares of SBL hold by the promoter group whereas remaining 49% is held by general public. The bank had acquired two “C” Class Financial Institution (Finance Company), Narayani National Finance Limited (started joint operation from July 14, 2016) and recently NIDC Capital Markets Limited (started joint operations from 10 February 2017). NCM Merchant Banking Limited (a Merchant Banker), a subsidiary of the erstwhile NIDC Capital Markets Ltd., has become a subsidiary of SBL after the acquisition, which is now operating under a new name Sunrise Capital Limited. The bank has an asset size of Rs. 71 Bn as on July 15, 2017, which witnessed 21.63% growth over July 15, 2016 (Rs. 59 Bn). The market share of SBL in terms of deposit base is 3.69% as on Mid-July 2017 and 2.87% as on Mid-April 2018; for the loan portfolio the market share is 3.89% as on Mid-July 2017 and 2.91% as on Mid-April 2018 of industry (Class „A‟ Commercial Banks).

Sunrise Capital is subsidiary company of Sunrise Bank Limited (SBL) with 78.57% holding in share capital of SCL. The parent company SBL acquired NIDC Capital Market Limited during February 2017. NCM Merchant Banking Limited, erstwhile subsidiary of NCML becomes subsidiary of SBL. SCL (in the name of former NCM Merchant Banking Limited) obtained merchant banker license dated October 12, 2010 and depository participant license dated February 15, 2013 from SEBON. SCL has obtained fund manager and depository license from SEBON as on May 24, 2019. SCL has Rs.200 Million paid up capital which has been held by two 'A' Class Commercial Bank of Nepal.

About the issue

Sunrise Capital Limited sets to open a new close end mutual fund scheme “Sunrise First Mutual Fund” worth Rs 1 arba with the maturity of 10 years.

The opening date of this fund is on Ashwin 08, 2076 and the closing date is on Ashwin 12, 2076 at the earliest. If the application is not adequately subscribed the closing date will be extended up to Kartik 07, 2076.

This fund is managed by Sunrise Capital Limited and sponsored by Sunrise Bank limited.

The issue will be of 10 crore units worth Rs 1 arba and per unit cost is Rs 10. An investor can apply for minimum of 100 units and maximum of 1 crore units.

85% of the total issue i.e. 8.5 crore units will be open for general public and remaining 15% will be kept as seed capital for sponsor Sunrise Bank Limited and fund manager Sunrise Capital Limited.

This is the third mutual fund managed by the Sunrise Capital Limited. Earlier there were 2 fund in the market viz NCM First Mutual Fund 2050 and NCM Mutual Fund 2059.

Dividend Payout

The dividend will be paid out of realized profits in proportion to investments made. The Retained earnings will be re-invested if any.

Supervisors of SFMF

General asset allocation of the proposed scheme's portfolio

Capital structure of Sunrise Capital

Shareholding composition of Sunrise Capital

Board of directors of Sunrise Capital

Management team of Sunrise Capital

Investment avenues

Securities that are registered with SEBON
Securities called for public offering
Securities that are listed in NEPSE
Debentures, Treasury Bills and other instruments of money market issued by Government of Nepal or Government Agencies receiving full guarantee or protection of GoN or NRB
Bank deposits
Money Market Instruments
Other areas as prescribed by SEBON

CARE Rating of Sunrise Capital

CARE Ratings Nepal Limited (CRNL) has assigned a Fund Management Quality Rating (FMQR) of ‘CARE-NP AMC Quality 3 (AMC 3)’ to Sunrise Capital Limited (SCL). CARE-NP AMC Quality 3 (AMC 3) indicates adequate assurance on management quality of Asset Management Company (AMC).

Key Rating Strengths

Strong fund sponsor/ shareholders; technical and management support from them
Experienced board of directors and management team in merchant and banking services
Established track record of operations in merchant banking
Professional fund supervisors with experience in their respective field
Past experience in handling the Mutual Fund Scheme
Corporate governance, policies and management information system in place

Key Rating Weaknesses

Volatile merchant banking performances over the period; however improved during FY18
Absence of track record as fund manager under Mutual Fund Regulations, 2010
Evolving Mutual Fund Industry
Volatile trend of NEPSE index

CARE Rating of Sunrise Bank

CRNL has assigned Issuer Rating of CARE-NP A- (Is) to Sunrise Bank Limited (SBL). CARE-NP A- (Is) indicates Issuers with this rating are considered to offer adequate degree of safety regarding timely servicing of financial obligations in Nepal. Such issuers carry low credit risk.

Key Rating Strength

Long track record, experienced Promoters and Management team
Adequate capitalisation and sufficient capital adequacy
Diversified and high geographical coverage through branches
Consistent growth in loans & advances and deposits
Considerable growth in total income and net profit over the period; comfortable RoTA, although declining over the period
Diversified loan portfolio
Moderate CASA ratio
Comfortable liquidity profile

Key Rating Weaknesses