Things To Know For The Prospective Investors Of Khaptad Laghubitta (KHLBSL); IPO Opens From Today For General Public
Wed, Aug 24, 2022 9:41 AM on IPO/FPO News, Company Analysis,
Company Profile:
Khaptad Laghubitta Bittiya Sanstha came into existence in September 2019 and started its operations in July 2020 with a license to operate in the Sudurpaschim Province. KHLBSL is promoted by a development bank, Shine Resunga Development Bank Limited (5.6%), an asset management company I Capital Private Limited (7.46%), and 60 individual promoters. Mr. Suresh Bahadur Bam is the Chief Executive Officer of the company. The registered and corporate office of KHLBSL is in Godawari-1 Kailali, Nepal.
About the issue:
Khaptad Laghubitta Bittiya Sanstha Limited (KHLBSL) will be issuing its IPO to the general public from today i.e. 8th Bhadra. The early closing date of this issue is on Bhadra 12 and if the issue is not fully subscribed till Bhadra 12, then it can be extended up to Bhadra 22, 2079.
Out of the offered 1,32,000 units; 1.5151% of the total offered shares to the general public i.e. 2000 units have been set aside for the employees of the company and 5% of the total offered shares to the general public i.e. 6,600 units have been set aside for the mutual funds. The remaining 1,23,400 units are for the general public.
Prabhu Capital Limited has been appointed as the issue manager for the IPO issuance. Applications can be placed for a minimum of 10 units and a maximum of 1,320 units.
After the issuance of 1,32,000 units worth Rs, 1.32 crore IPO shares the general public i.e 33% of total capital will together raise its paid-up capital to Rs 4 crore, and the promoter/public ratio will be 67:33.
| Khaptad Laghubitta Bittiya Sanstha Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 400,000.00 | 40,000,000.00 |
| Total Issue (General Public) | 33% | 132,000 | 13,200,000.00 |
| Issue Manager | Prabhu Capital Limited | ||
| Issue Open Date | Bhadra 08 | ||
| Issue Closing Date (earliest) | Bhadra 12 | ||
| Issue Closing Date (Late) | Bhadra 22 | ||
| Minimum Application | 10 | ||
| Maximum Application | 1,320 | ||
Capital Structure:
| Authorized Capital | 10,00,00,000 |
| Issued Capital | 4,00,00,000 |
| Current Paid-Up Capital | 2,38,00,000 |
| Capital after IPO Issuance | 4,00,00,000 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 238,000.00 | 23,800,000.00 | 67% | Already issued |
| General Public | 132,000.00 | 13,200,000.00 | 33% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Suman Pd. Shrestha | Chairman |
| Mr. Chandra B. Chand | Board of Director |
| Mr. Dabal B. Shah | Board of Director |
| Mr. Randev Krishna Shrestha | Board of Director |
| Mrs. Ishwori Regmi Panta | Independent Director |
Financial Statement:
| Financial Highlights | ||||||
|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | ||||
| 2076/77 | 2077/78 | 2078 (Q3) | 2078/79 | 2079/80 | 2080/81 | |
| Total Paid-Up Capital ('000) | 23,800.00 | 23,800.00 | 40,000.00 | 40,000.00 | 40,000.00 | 40,000.00 |
| Reserve & Surplus ('000) | 0.81 | 291.74 | 3,183.82 | 7,844.04 | 16,241.52 | 27,101.44 |
| Debt ('000) | - | - | - | - | - | - |
| Revenue ('000) | - | - | - | - | - | - |
| Interest Expenses ('000) | - | 5,827.38 | 22,257.29 | 20,936.89 | 32,179.82 | 38,829.21 |
| Net Profit ('0000) | 0.81 | 290.93 | 2,892.08 | 4,660.22 | 8,397.49 | 10,859.92 |
| Earnings per share (Rs.) | 0.003 | 1.09 | 10.79 | 11.65 | 20.99 | 27.15 |
| Net worth per share (Rs.) | 100.00 | 101.09 | 111.66 | 119.38 | 140.18 | 167.21 |
| Debt-Equity (times) | - | - | - | - | - | - |
| Return on Equity (%) | 0.00 | 0.11 | 0.60 | 0.83 | 1.25 | 1.62 |
ICRA Rating:
ICRA Nepal has assigned an issuer rating of [ICRANP-IR] BB- (pronounced ICRA NP Issuer Rating Double B minus) to Khaptad Laghubitta Bittiya Sanstha Limited (KHLBSL). Issuers with this rating are considered to have a moderate risk of default in the timely servicing of financial obligations.
Key Strengths:
- Institutional promoters and experienced management team.
- Adequate capitalization profile.
- Profitable since inception.
Key Challenges:
- Short track record of operation with limited network base.
- Moderate asset quality.
- Funding profile highly dependent on external borrowings.
- Low penetration of credit bureau in Nepalese MFI sector; risk of overleveraged borrowers remains high.
- Regulatory risk.
How much to apply?
When we observe the current scenario, investors have still shown a high level of confidence in IPO despite declining NEPSE, which is shown by the huge demand in the recently concluded IPO.
When we look at the current trend of IPO in the market, we see that more than 16-17 lakhs of investors have been applying in the recent issue. This shows that, even if a quarter of this number applied for the issue of Khaptad Laghubitta Bittiya Sanstha Limited, the issue will be oversubscribed. Since the "10 kitta rule" still holds true for IPO; 12,340 applicants will be lucky enough to get the 10 unit shares of Khaptad Laghubitta Bittiya Sanstha Limited. So, it is advisable to apply only 10 units.
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