Things to know for prospective investors about IPO of Prabhu Life Insurance Limited; high chance of lottery for 10 units
Sun, Dec 13, 2020 12:54 PM on IPO/FPO News, Exclusive, Company Analysis, Experts Speak,
Company Information:
Prabhu Life Insurance Limited (former Star Life Insurance Co. Ltd) was established on Mangsir-28, 2074. The company is licensed by the Insurance Board in 2016/2017. The company has been providing its services from 90 outlets and has 10,463 agents running individually and has 25 corporate agents spread across the country. The company is owned by Prabhu Group; a renowned business group in the country. The company is majorly promoted by Prabhu Bank Limited and Shangrila Development Bank Limited.
About the Issue:
Prabhu Life Insurance Company Limited issuing 6,000,000 units ordinary shares worth Rs. 60 crores to the general public from Mangsir-29, 2077. The early closing date of this IPO issue is on Poush-02, 2077 and if the issue is not subscribed till Poush-02 then this issue can be extended up to Poush-13, 2077.
Out of offered 6,000,000 untis; 5% of the issued capital i.e. 300,000 untis have been allotted for the employees of the company and 5% of the total capital have been allotted for the mutual funds. The remaining 5,400,000 units are for the general public.
Applications can be placed for a minimum of 10 units and a maximum of 50,000 units.
Siddhartha Capital Limited has been appointed as the issue manager for the IPO issuance.
The paid-up capital will reach Rs. 2.00 Arba after the issuance of the public shares. After the IPO issue; public holding will be 30% and promoters holding will be 70%.
|
|
Percentage |
Units |
Amount |
|---|---|---|---|
|
Total Capital |
100% |
20,000,000 |
2,000,000,000 |
|
Total Issue to Public (IPO) |
30% |
6,000,000 |
600,000,000 |
|
Employees |
5% of IPO units |
300,000 |
30,000,000 |
|
Mutual Fund |
5% of IPO units |
300,000 |
30,000,000 |
|
Public |
90% of IPO units |
5,400,000 |
540,000,000 |
|
Issue Manager |
Siddhartha Capital Limited |
||
|
Issue Open Date |
Mangsir-29, 2077 |
||
|
Issue Closing Date (Earliest) |
Poush-02, 2077 |
||
|
Issue Closing Date (Late) |
Poush-13, 2077 |
||
|
Minimum Application |
10 |
||
|
Maximum Application |
50,000 |
Credit Rating:
ICRA Nepal has assigned the issuer rating of [ICRANP-IR] BB+ (pronounced ICRA NP Issuer Double B plus) to Prabhu Life Insurance Limited (PLIL). Issuers with this rating have a moderate risk of default regarding timely servicing of financial obligations. ICRA Nepal has also assigned a grading of [ICRANP] IPO Grade 4, indicating below-average fundamentals, to the proposed initial public offering (IPO).
Grading Strengths:
- Institutional ownership with brand sharing of ‘Prabhu’
- High portion of long-term endowment business in overall premium earnings
- Adequate reinsurance support
- Adequate quality of investments with good investment earning potential
Grading Challenges:
- Limited track record with a small market share
- Subdued return indicators with a high cost of operations
- Solvency profile
(SOURCE: ICRA Nepal)
Capital Structure:
|
Authorized Capital |
|
|
Issued Capital |
2,000,000,000 |
|
Current Paid-Up Capital |
1,400,000,000 |
|
Paid-Up Capital After This IPO |
2,000,000,000 |
Shareholding Structure:
|
|
Number of Shares |
Amount |
Percentage |
Remarks |
|---|---|---|---|---|
|
Promoter Shareholders |
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 |
Dr. Atma Ram Ghimire |
Chairman |
|
2 |
Mr. Subhash Amatya |
Director |
|
3 |
Mr. Maniram Pokharel |
Director |
|
4 |
Mr. Naresh Bahadur Malla |
Director |
|
5 |
Mr. Rameshwor Sapkota |
Director |
|
6 |
Mr. Apoorba Prasad Joshi |
Director |
Management Team:
|
Management Team |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Mr. Narayan Prasad Poudel |
Chief Executive Officer |
|
2 |
Mr. Kishor Prasad Lamichhane |
Dy. Chief Executive Officer |
|
3 |
Mr. Namash Singh Deuja |
Chief Operating Officer |
|
4 |
Mr. Prayash Shrestha |
Chief Business Officer |
|
5 |
Mr. Prabhat Sibakoti |
Chief Re-Insurance & Agency |
|
6 |
Mr. Lekhnath Gautam |
Chief Finance Officer |
|
7 |
Mr. Yogendra Khatiwada |
Head Training |
|
8 |
Mr. Rujee Shrestha |
Head Underwriting |
Financial Highlights:
|
Particulars |
Actual |
Estimated* |
|||||
|---|---|---|---|---|---|---|---|
|
2073/2074 |
2074/2075 |
2075/2076 |
2076/2077* |
2077/2078 |
2078/2079 |
2079/2080 |
|
|
Total Paid-Up Capital ('000) |
448,876.50 |
1,400,000.00 |
1,400,000.00 |
1,400,000.00 |
2,000,000.00 |
2,000,000.00 |
2,000,000.00 |
|
Reserve & Surplus ('000) |
273.615 |
39,069.75 |
115,989.01 |
165,035.89 |
289,232.81 |
476,676.31 |
713,204.31 |
|
Contingent Fund ('000) |
- |
4,310.68 |
9,065.94 |
13,574.88 |
27,089.19 |
47,916.25 |
74,197.14 |
|
Insurance Fund |
- |
86,551.09 |
352,521.55 |
1,084,393.88 |
2,412,229.32 |
4,882,153.97 |
8,926,263.65 |
|
Gross Premium ('000) |
- |
114,383.64 |
473,851.00 |
1,197,837.90 |
1,963,154.29 |
3,241,472.50 |
4,864,144.56 |
|
Net Premium ('000) |
- |
111,942.28 |
455,910.82 |
1,159,435.58 |
1,925,712.08 |
3,131,049.63 |
4,697,851.98 |
|
Investment Income ('000) |
2,587.40 |
138,831.57 |
159,613.88 |
184,127.81 |
340,175.36 |
616,228.55 |
1,008,325.82 |
|
Net Profit ('000) |
1,322.19 |
52,452.15 |
81,674.52 |
53,552.06 |
135,143.11 |
208,270.55 |
262,808.89 |
|
Net Premium /Gross Premium (%) |
- |
97.87% |
96.21% |
96.79% |
98.09% |
96.59% |
96.58% |
|
Earnings per share (Rs.) |
0.29 |
3.75 |
5.83 |
3.83 |
6.76 |
10.41 |
13.14 |
|
Net worth per share (Rs.) |
100.06 |
103.59 |
106.56 |
112.94 |
114.82 |
126.93 |
139.37 |
|
Return on Equity (%) |
0 |
3.98% |
5.32% |
3.39% |
6.48% |
8.95% |
9.43% |
How much to apply?
If we see the recently concluded IPO’s; more than 9 lakh applicants applied for the issue and we assume that the same or even more craze prevails in Prabhu Life Insurance Limited’s IPO too. Since 10 kitta rule exists for IPO; 540,000 applicants will be lucky enough to get the 10 shares of Prabhu 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 Prabhu Life Insurance Limited.
