"Nabil Flexi Cap (NFCF)" Opens From Today; All information You Need To Know In One Place

Wed, Nov 9, 2022 7:15 AM on IPO/FPO News, Mutual Fund, Company Analysis,

Company Profile

The mutual fund scheme “Nabil Flexi Cap (NFCF)” is promoted by Nabil Bank Limited and managed by Nabil Investment Banking.

Nabil Investment Banking (NABILINV) commenced its operations from April 2010. The company is licensed by SEBON as a merchant banker (issue management, registrar to shares, underwriter, depository participant, portfolio manager and corporate advisory). Nabil Invest has the MF depository’s license in addition to the fund manager’s license from SEBON (as per Mutual Fund Regulation, 2010), and is currently acting in both capacities for its three close-ended MF schemes i.e. Nabil Equity Fund (launched in November 2016), Nabil Balanced Fund II (launched in May 2019) and Nabil Balanced Fund III (launched in Sept 2021). Nabil Invest reported a net profit of ~NPR 143 million for FY2020 on an asset base of ~NPR 1080 million as of mid-July 2021. Its capital was NPR 200 million and the net worth was ~NPR 410 million as of mid-July 2021.

Nabil Bank Limited (NABIL), the first private sector class A commercial bank in Nepal, started its commercial operations from July 1984 as Nepal Arab Bank Limited. Nabil started off as joint venture bank with Emirates Bank International. The latter divested its stake in Nabil, which was ultimately taken over by NB International, an Ireland based special purpose vehicle associated with CG group. The name was changed to Nabil bank, following the withdrawal of joint venture partner Emirates Bank International in 1997. Head quartered in Kathmandu, Nabil is the leading bank in terms of networth and market capitalisation as of mid-July 2021.

About the issue

Nabil Investment Banking Limited sets to open a new open-end mutual fund scheme “Nabil Flexi Cap (NFCF)” worth Rs 75 crores.

The opening date of this fund is today i.e 23rd Kartik and the closing date is on 27th Kartik, 2079 at the earliest. If the application is not adequately subscribed the closing date will be extended up to Mangsir 07.

This fund is managed by Nabil Investment Banking Limited and sponsored by Nabil Bank. The issue is of 7.5 crore units worth Rs 75 crores and the per-unit cost is Rs 10. An investor can apply for a minimum of 100 units and a maximum of 75 lakh units.

15% of the total units i.e. 1,12,50,000 units worth Rs. 11.25 crores have been allocated to the fund promoter Nabil Bank Limited and scheme manager Nabil Investment Banking Limited whereas from the remaining 6,37,50,000 units, 5 crores units will be allocated to the general public in the first phase.

As of now, Nabil Investment Banking manages three close-ended mutual funds, Nabil Equity Fund (NEF), Nabil Balanced Fund - 2 (NBF2) and Nabil Balanced Fund III (NBF3).

Nabil Flexi Cap
Fund Size Rs. 75 Crores
Per Unit Price Rs.10
Total Units 7,50,00,000
Fund Sponsor Nabil Bank
Fund Manager and Depository Nabil Investment Banking 
Seed Fund by Nabil and NABILINV - 15% (units) 1,12,50,000 
General Public (units) 6,12,50,000
Nature of Scheme Open End
Minimum units to be applied 100
Maximum units to be applied 75,00,000
Issue open date 23rd Kartik
Issue closing date (earliest) 27th Kartik
Issue closing date (latest) 7th Mangsir
ICRA rating of Nabil Bank [ICRANP-IR] AA-
ICRA rating of Nabil Investment Banking [ICRANP] AMC Quality 3+

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 NFCF:

S No. Name Experience
1 C. A. Madan Krishna Sharma Professional experience of more than 30 years
2 Prof. Dr. Fatta Bahadur K.C. Former Chairperson of Beema Samiti and more than 36 years of experience in teaching and research
3 Dr. Devi Pd Sharma Bhandari More than 37 years of experience in teaching and research
4 Mr. Dev Bahadur Bohora Former Administrator (Deputy Auditor General), Office of the Auditor General Nepa
5 Mr. Nabin Kumar Verma More than 29 years of experience in education and legal profession

Capital structure of Nabil Investment Banking:

Particulars Amount
Authorized Capital Rs. 1 Arba
Issued Capital Rs. 27 Crores
Paid-up Capital Rs. 27 Crores

Board of directors:

S. No Name Position
1 Mr. Varun Chaudhary Chairman
2 Mr. Adarsha Bajgain Vice Chairman
3 Mr. Ganesh Prasad Awasthi Director
4 Mr. Sanjay Pokhrel Director
5 Mr. Bharat Adhikari Professional Independent Director
6 Mr. Shankar Prasad Pandey Professional Independent Director

Investment Avenues:

  • Securities that are registered with SEBON.
  • Securities called for a 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.

ICRA Rating (Nabil Bank & Nabil Investment Banking):

1. Nabil Bank:

ICRA Nepal has reaffirmed the issuer rating of [ICRANP-IR] AA- (pronounced ICRA NP issuer rating Double A minus) to Nabil Bank Limited (Nabil), indicating a high degree of safety regarding the timely servicing of financial obligations

Key Strengths:

  • Long track record, strong promoter profile and experienced management team.
  • Strong competitive position, long-established relationship with customers and adequate market share.
  • Healthy profitability profile supported by adequate NIMs and gain on sale of securities despite the increased operating expenses.
  • Adequate capitalisation profile supported by healthy internal capital generation and retention.
  • Improved portfolio granularity.

Key Challenges:

  • Increased delinquency and NPLs raises the asset quality concerns.
  • Post-acquisition integration challenge.
  • Uncertain operating environment.

2. Nabil Investment Banking:

ICRA Nepal has reaffirmed the fund management quality rating of [ICRANP] AMC Quality 3+ (AMC 3+; pronounced ICRA NP Asset Management Company Quality Three plus) to Nabil Investment Banking Limited (Nabil Invest or the company). The rating indicates adequate assurance on fund management quality

Key Strengths:

  • Fair track record in fund management with satisfactory fund performance.
  • Strong ownership profile.
  • Experienced fund supervisors.
  • Regulatory support for development of MF industry and financial markets.

Key Challenges:

  • Volatile operating environment could impact NAV trajectory.
  • Developing stage of mutual fund industry.
  • Limited investment diversification avenues so far; expected to gradually improve.
  • Sectoral concentration risks.
  • Moderate attraction of MF schemes among investors, albeit improving in recent periods.

Click here to view the offer letter