Things to know for prospective investors about IPO of Sadhana Laghubitta; advisable to apply only 10 units
Fri, Jul 3, 2020 10:09 AM on IPO/FPO News, Stock Market, Company Analysis, Financial Analysis,
Company Profile:
Sadhana Laghubitta Bittya Sanstha ltd. is a “D” class financial institution licensed from Nepal Rastra Bank in 07/22/2074. It is primarily engaged in providing microfinance loans. It’s headquartered at Haramtari-6, Gorkha. Sadhana Laghubitta Bittya Sanstha ltd incorporated as a public limited company on 31/02/2073 under company Act 2063. The microfinance currently has 60 branches in 22 districts. The 22 districts include Gorkha, Dhading, Lamjung, Makwanpur, Tanahu, Kaski, Parbat, Baglung, Nawalparasi Paschim, Syangja, Nawalparasi east, Rupandehi, Gulmi, Myagdi, Chitwan, Parsa, Saptari, Siraha, Rautahat, Kalpilbastu, Sarlahi, Mahottari.
Sadhana Laghubitta Bittya Sanstha ltd is national level microfinance and can operate any part of the country upon the approval of Nepal Rastra Bank.
The deposit balance of Sadhana Laghubitta Bittya Sanstha Ltd as of Chaitra end, 2076 stands at Rs 43.16 crore and borrowed Rs 1.17 Arba. It has a loan and advances of Rs 1.70 Arba. Its current paid-up capital stands at Rs 14.7 crore.
About the issue
Sadhana Laghubitta Sanstha Limited is issuing 7,07,800 units ordinary shares worth Rs. 7.07 crores to the general public form Ashad 21, 2077. The early closing date of this IPO issue is on Ashad 24, 2077. If the issue is not subscribed till Ashad 24 then the issue can be extended to Shrawan 04, 2077.
Out of offered 7,07,800 units; 0.5% of issue capital i.e. 10,890 units have been allotted for the employees of the company and 5% of the total offered to the general public i.e. 35,390 units have been allotted for the mutual funds. The remaining 6,61,520 units are for the general public.
Applications can be placed for a minimum of 10 units and a maximum of 1000 units.
Global IME Capital Limited has been appointed as the issue manager for the IPO issuance.
After the IPO issue, public holding will be 32.50% and promoters holding will be 67.50%. The major shareholders of the company are Nepal Credit and Commerce Bank Limited (NCC Bank) and Shangrila development Bank Limited with a 14% stake in the company.
Why is the company issuing shares to the general public?
- The amount collected from the issuance of shares will be allocated in different sectors like animal husbandry, agriculture, service sector, and other small loans.
- To maintain the growth of capital structure.
- To diversify the company’s investments and ensure the smooth running of the operation.
ICRA Rating:
ICRA rating Nepal has assigned grading od [ICRANP] IPO Grade 4+ to the proposed Initial Public Offer (IPO) of Sadhana Laghubitta Bittya Sanstha Limited (SLB). [ICRANP] IPO grade 4+ indicates below Fundamentals. ICRA assigns IPO grades on a scale of Grade 1 to Grade %, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor fundamentals.
Key Grading Strengths:
- Regulated institutional promoters
- Healthy growth over a small base
- Adequate target in the target geography
- Healthy capitalization profile
- Fair asset quality
- Improvement in profitability profile
Capital structure:
Shareholding Structure:
Primary shareholders:
Board of Directors:
Management Team:
Financial Highlights:
Conclusion
Microfinance is one of the most pursued sectors by investors in the Nepali Capital Market and one of the reasons is quick to market price appreciation. Now, that all the information is available, will you be applying for Sadhana Laghubitta Sanstha’s IPO?
How much to apply?
The total shares floated by Sadhana Laghubitta Sanstha Limited is 7,07,800 units, of which 6,61,520 unit is available to the general public after the allocation of shares to staff and mutual fund.
If we see the recently concluded IPO of Nepal Reinsurance Company: a total of 3,91,626 applicants applied for the company IPO. Also, the IPO of NIC Asia Laghubitta Sanstha’s where 3,97,741 applicants applied for its IPO and we assume that same or even more craze prevails in Sadhana Laghubitta IPO’s too.
Since 10 kitta rule exists for IPO; 66,152 applicants will be lucky enough to get the shares of Sadhana Laghubitta Sanstha Limited. Hence; it is more or less confirms that this IPO allotment would be done through a lottery. It is advisable to apply only 10 units.
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