CRNL has assigned grading of ‘CARE-NP IPO Grade 4’ to the proposed Initial Public Offer (IPO) of AJOD Insurance Limited (AIL). ‘CARE-NP IPO Grade 4’ indicates Below Average Fundamentals. AIL proposes to issue 3 Million shares of face value of Rs.100 each at par aggregating Rs.300 Million.
The grading assigned to AIL is constrained by its moderate financial risk profile and high combined ratio, nascent stage of operation with relatively small market share in the non-life insurance industry and competition from other insurance companies. Further, the grading is constrained by AIL’s concentration in motor segment and insufficient solvency ratio.
The grading, however, derives strength from strong promoter group, experienced board and management team, diversified investment book with fair return on investment.
AJOD Insurance Limited (AIL) is a general (non-life) insurance company. The company started its operation from July 05, 2016. The company has been offering a range of general insurance covers for businesses & individuals and has a comprehensive range of general insurance products for Fire, Marine, Motor, Engineering, Miscellaneous, Agriculture and Aviation etc. AIL has network of 39 branches (including head office) supported by 215 employees and 355 insurance agents as on Mid-December 2019.
AIL has assets base of Rs.1,145 Million as on July 16, 2019 which witnessed 55.40% growth over FY18. The capital structure of the company comprises of an authorized capital of Rs.1000 Million out of which Rs.700 Million is paid up capital from the promoter group and the remaining is proposed to be issued to the public through IPO.
Source: Care Ratings Nepal