Things to know for prospective investors about IPO of Jyoti Life Insurance Company Limited; high chance of lottery for 10 units
Thu, Mar 4, 2021 1:05 PM on IPO/FPO News, Company Analysis, Stock Market, Exclusive,
Company Information:
Jyoti Life Insurance Company Limited (JLICL) is a life insurance company registered under the Company Act 2006 on May 17, 2007. It obtained a license from Insurance Board on September 04, 2017. JLICL has been offering an extensive range of products as Money Back, Endowment, Whole Life, Term Assurance Products, etc. through a diversified sales network. The company plans to reach out to all parts of Nepal and make services available to all Nepali Citizens and safeguard their future interests. The company is promoted by a diverse group of manufacturing, trading, and financial institutions.
About the Issue:
Jyoti Life Insurance Company Limited issuing 6,600,000 units of ordinary shares worth Rs. 66 crores to the general public from Falgun-21, 2077. The early closing date of this IPO issue is on Falgun-26, 2077 and if the issue is not subscribed till Falgun-26 then this issue can be extended up to Chaitra-06, 2077.
Out of offered 6,600,000 units; 5% of the issued capital i.e., 330,000 units have been allotted for the employees of the company and 5% of the total capital have been allotted for the mutual funds. The remaining 5,940,000 units are for the general public.
Applications can be placed for a minimum of 10 units and a maximum of 66,000 units.
NMB Capital Limited has been appointed as the issue manager for the IPO issuance.
The paid-up capital will reach Rs. 2.20 Arba after the issuance of the public shares. After the IPO issue; public holding will be 30% and promoters holding will be 70%.
|
Jyoti Life Insurance Company Limited |
|||
|---|---|---|---|
|
|
Percentage |
Units |
Amount (Rs.) |
|
Total Capital |
100% |
1,000,000 |
100,000,000 |
|
Total Issue |
30% |
6,600,000 |
660,000,000 |
|
Employees |
5% of IPO Units |
330,000 |
33,000,000 |
|
Mutual Fund |
5% of IPO Units |
330,000 |
33,000,000 |
|
Public |
20% |
5,940,000 |
594,000,000 |
|
Issue Manager |
NMB Capital |
||
|
Issue open date |
Falgun 21, 2077 |
||
|
Issue closing date (earliest) |
Falgun 26, 2077 |
||
|
Issue closing date (late) |
Chaitra 06, 2077 |
||
|
Minimum application |
10 |
||
|
Maximum application |
66,000 |
||
Credit Rating:
CARE Ratings Nepal Limited (CRNL) has assigned the ‘CARE-NP BBB (Is)’ rating to Jyoti Life Insurance Company Limited (JLIC). 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.
Grading Strengths:
- Experienced board and management team
- Moderate financial risk profile and improving combined ratio
- Moderate solvency profile
- Good assets quality of investment book with fair return on investment
- Adequate geographical coverage through branches
Grading Challenges:
- 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 |
2,200,000,000 |
|
Current paid-up capital |
1,540,000,000 |
|
Paid-up capital after issuance of IPO |
2,200,000,000 |
Shareholding Structure:
|
Shareholding Structure |
||||
|---|---|---|---|---|
|
|
Number of shares |
Amount |
Percentage |
Remarks |
|
Promoters |
15,400,000 |
1,540,000,000 |
70% |
Already issued |
|
General Public |
6,600,000 |
660,000,000 |
30% |
To be issued |
|
Total |
22,000,000 |
2,200,000,000 |
100% |
|
Board of Directors:
|
Board Of Directors |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Mr. Nanda Kishor Sharma |
Chairman |
|
2 |
Mr. Aakash Golchha |
Director |
|
3 |
Mrs. Sharmila Shrestha |
Director |
|
4 |
Mr. Jayanta Kumar Agrawal |
Director |
|
5 |
Mr. Dipak Kumar Agrawal |
Director |
Management Team:
|
Management Team |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Mr. Prakash Bikram Khatri |
Chief Executive Officer |
|
2 |
Mr. Pharshu Ram Marasini |
Head-Agency Sales |
|
3 |
Mr. Rajiv Gurbacharya |
Head-Underwriting |
|
4 |
Mr. Umesh Mainali |
Head-Agency Service |
|
5 |
Mr. Shandan Pokharel |
Head-Corporate Solutions |
|
6 |
Mr. Sachet Shrestha |
Head-Reinsurance |
|
7 |
Mr. Ram Prasad Thapaliya |
Company Secretary |
|
8 |
Mr. Ravi Sarraf |
Head-Finance |
|
9 |
Mr. Uttam Acharya |
Head-Training and Development |
|
10 |
Mr. Jayandra Dongol |
Head-Branding and Corporate Communication |
|
11 |
Mr. Bibek Gautam |
Head-HR/Admin |
|
12 |
Mr. Nirnjan Regmi |
Head-Information Technology |
Purpose of Issuing IPO:
|
S. N |
Particulars |
Amount |
|---|---|---|
|
1 |
Fixed Deposit in Commercial Bank |
420,000,000 |
|
2 |
Fixed Deposit in Development Bank |
180,000,000 |
|
3 |
Investment in Public Limited Companies |
35,000,000 |
|
4 |
Branch Expansion |
15,000,000 |
|
5 |
Upgrade existing Branches |
10,000,000 |
|
Total |
660,000,000 |
|
Financial Highlights:
|
Particulars |
Actual |
Estimated* |
|||||
|---|---|---|---|---|---|---|---|
|
2074/2075 |
2075/2076 |
2076/2077 |
2076/2077* |
2077/2078 |
2078/2079 |
2079/2080 |
|
|
Paid-up capital ('000) |
1,540,000.00 |
1,540,000.00 |
1,540,000.00 |
1,540,000.00 |
2,200,000.00 |
2,200,000.00 |
2,200,000.00 |
|
Reserves & Surplus ('000) |
9,662.00 |
117,160.00 |
280,502.00 |
465,426.00 |
718,579.00 |
1,036,599.00 |
1,407,794.00 |
|
Contingent Fund ('000) |
0.00 |
13,325.00 |
32,014.00 |
41,854.00 |
57,091.00 |
76,419.00 |
98,886.00 |
|
Insurance Fund ('000) |
- |
- |
- |
1,867,389.00 |
3,721,909.00 |
6,904,859.00 |
11,565,996.00 |
|
Gross Premium ('000) |
- |
285,018.00 |
1,017,588.00 |
1,888,963.00 |
2,969,962.00 |
4,621,812.00 |
6,524,199.00 |
|
Net Premium ('000) |
- |
274,219.00 |
978,749.00 |
1,814,306.00 |
2,795,375.00 |
4,363,730.00 |
6,172,342.00 |
|
Claim Payment ('000) |
- |
500.00 |
5,769.00 |
20,445.00 |
55,556.00 |
81,150.00 |
227,488.00 |
|
Net Profit ('000) |
9,662.00 |
120,823.00 |
182,031.00 |
194,763.00 |
268,391.00 |
337,347.00 |
393,662.00 |
|
Net Premium/Gross Premium (%) |
- |
96.21% |
96.18% |
96.05% |
94.12% |
94.42% |
94.61% |
|
Earnings per share (Rs.) |
0.63 |
7.85 |
11.82 |
12.65 |
12.20 |
15.33 |
17.89 |
|
Net worth per share (Rs.) |
100.63 |
108.47 |
120.29 |
132.94 |
135.26 |
150.59 |
168.49 |
|
Return on Equity (%) |
0.62% |
7.23% |
9.83% |
9.51% |
9.02% |
10.18% |
10.62% |
How much to apply?
If we see the recently concluded IPO’s; more than 15 lakh applicants applied for the issue and we assume that the same or even more craze prevails in Jyoti Life Insurance Limited’s IPO too. Since 10 kitta rule exists for IPO; 594,000 applicants will be lucky enough to get the 10 shares of Jyoti 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 luck draw. So, it is advisable to apply only 10 units (minimum) in the IPO issue of Jyoti Life Insurance Limited.
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