IPO of Union Life Insurance Opening Today; Everything You Need To Know About the Company
Thu, Jul 8, 2021 5:01 AM on IPO/FPO News, Company Analysis, Exclusive,
Company Information:
Union Life Insurance Company Limited (ULICL) is a public limited life insurance company (LIC), operating since July 2017. Its head office is in New Baneswor, Kathmandu. The company has an equity investment of multiple business houses in Nepal such as Jagadamba group, Golchha Organization, Gadiya group, Neupane group, Rajesh Hardware group & Tibrewala Group.
As of mid-July 2020, the major shareholders of ULICL include, Mr. Shekhar Golcha (~19.9%), Mr. Sahil Agrawal (~19.9%) Mr. Sulav Agrawal (~18%), Mr. Sandip Kumar Agrawal (~6.6%), Mr. Rahul Kumar Agrawal (~6.6%), and Mr. Sharad Kumar Tibrewala (~6.6%) among others.
About the Issue:
Union Life Insurance Company Limited issuing 6,450,000 units of ordinary shares worth Rs. 64.5 crores to the general public from Ashad-24, 2078. The early closing date of this IPO issue is on Ashad-28, 2077 and if the issue is not subscribed till Ashad-28 then this issue can be extended up to Shrawan-7, 2078.
Out of offered 6,450,000 units; 5% of the issued capital i.e., 322,500 units have been allotted for the employees of the company and 5% of the total capital has been allotted for the mutual funds. The remaining 5,805,000 units are for the general public.
Applications can be placed for a minimum of 10 units and a maximum of 32,250 units.
Prabhu Capital Limited has been appointed as the issue manager for the IPO issuance.
The paid-up capital will reach Rs. 2.15 Arba after the issuance of the public shares. After the IPO issue; public holding will be 30% and promoters holding will be 70%.
|
Union Life Insurance Company Limited |
|||
|---|---|---|---|
|
|
Percentage |
Units |
Amount (Rs.) |
|
Total Capital |
100% |
15,050,000 |
1,505,000,000 |
|
Total Issue |
30% |
6,450,000 |
645,000,000 |
|
Employees |
5% of IPO Units |
322,500 |
32,250,000 |
|
Mutual Fund |
5% of IPO Units |
322,500 |
32,250,000 |
|
Public |
- |
5,805,000 |
580,500,000 |
|
Issue Manager |
Prabhu Capital Limited |
||
|
Issue open date |
Ashad-24 2078 |
||
|
Issue closing date (earliest) |
Ashad- 28 2078 |
||
|
Issue closing date (late) |
Shrawan-07, 2078 |
||
|
Minimum application |
10 |
||
|
Maximum application |
32,250 |
||
Credit Rating:
ICRA Nepal has assigned the issuer rating of [ICRANP-IR] BBB(pronounced ICRA NP Issuer Rating triple B) to UnionLife Insurance Company Limited (ULICL). Issuers with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations.
Grading Strengths:
- Adequate branch and agency network, experienced management and ownership
- Product mix dominated by endowment products; good policy continuation rate
- Adequate reinsurance arrangement
- Progressive profitability supported by investment earnings
Grading Challenges:
- Limited track record and therefore untested underwriting controls
- Suboptimal solvency margin
- impact of an ongoing covid-19 pandemic on the life insurance industry
(SOURCE: ICRA Nepal)
Capital Structure:
|
Capital Structure |
|
|---|---|
|
Authorized capital |
2,150,000,000 |
|
Issued capital |
2,150,000,000 |
|
Current paid-up capital |
1,505,000,000 |
|
Paid-up capital after issuance of IPO |
2,150,000,000 |
Shareholding Structure:
|
Shareholding Structure |
||||
|---|---|---|---|---|
|
|
Number of shares |
Amount |
Percentage |
Remarks |
|
Promoters |
15,050,000 |
1,505,000,000 |
70% |
Already issued |
|
General Public |
6,450,000 |
645,000,000 |
30% |
To be issued |
|
Total |
21,500,000 |
2,150,000,000 |
100% |
- |
Board of Directors:
|
Board Of Directors |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Mr. Sulav Agrawal |
Chairman |
|
2 |
Mr. Sandeep Kumar Agrawal |
Director |
|
3 |
Mr. Jeewan Kumar Agrawal |
Director |
|
4 |
Mr. Debi Prasad Sharma |
Director |
|
5 |
Mrs. Sima Golchha |
Director |
Management Team:
|
Management Team |
||
|---|---|---|
|
S.N |
Name |
Position |
|
1 |
Manoj Kumar Lal Karna |
Chief Executive Officer |
|
2 |
Kapil Kumar Dahal |
DCEO/Information Officer |
|
3 |
Madhav Prasad Sharma |
DGM |
|
4 |
Ram Shrestha |
Head- Underwriting Department |
|
5 |
Ishwar Kumar Sedai |
Company Secretary |
|
6 |
Rabin Shrestha |
Head-IT Department |
|
7 |
Surya Bahadur Bogati |
Head-Finance |
|
8 |
Ritendra Lal Karna |
Head-Agency Department |
|
9 |
Prakash Neupane |
Head-HR/Admin |
|
10 |
Geeta Shrestha |
Head-Corporate Marketing |
|
11 |
Hark Bahadur Budhathoki |
Head-Training Department |
|
12 |
Bhuparaj Parajuli |
Province Head-Province 1 |
|
13 |
Hari Prasad Dhungana |
Province Head-Province 3 |
|
14 |
Tulk Nath Acharya |
Province Head-Province 4 |
|
15 |
Bhoj Kumar Kunwar |
Province Head-Province 5 |
|
16 |
Narayan Pangeni |
Province Head-Province 6 |
|
17 |
Chandra Bahadur Bohara |
Province Head-Province 7 |
Use of funds:
|
S.N |
Particulars |
Amount |
|---|---|---|
|
1 |
Investment in Bonds/Debentures |
161,250,000 |
|
2 |
Fixed Deposit in Commercial Bank |
258,000,000 |
|
3 |
Fixed Deposit in Development Bank |
96,750,000 |
|
4 |
Fixed Deposit in Microfinance Companies |
64,500,000 |
|
5 |
Investment in Public Limited Companies |
64,500,000 |
|
Total |
645,000,000 |
|
Financial Highlights:
|
Particulars |
Acutal |
Estimated* |
||||
|---|---|---|---|---|---|---|
|
2074/2075 |
2075/2076 |
2076/2077* |
2077/2078 |
2078/2079 |
2079/2080 |
|
|
Paid-up capital ('000) |
1,505,000.00 |
1,505,000.00 |
1,505,000.00 |
2,150,000.00 |
2,150,000.00 |
2,150,000.00 |
|
Reserves & Surplus ('000) |
80,181.15 |
204,963.58 |
656,455.07 |
706,679.17 |
827,233.52 |
996,721.37 |
|
Contingent Fund ('000) |
8,909.02 |
22,773.73 |
72,939.45 |
78,519.91 |
91,914.84 |
110,746.82 |
|
Insurance Fund ('000) |
400,966.70 |
2,208,570.58 |
4,364,129.33 |
9,130,008.62 |
18,854,165.38 |
34,823,450.18 |
|
Net Profit ('000) |
76,599.90 |
138,647.15 |
501,657.21 |
89,574.74 |
133,949.28 |
188,319.83 |
|
Earnings per share (Rs.) |
5.09 |
9.21 |
33.33 |
4.17 |
6.23 |
8.76 |
|
Net worth per share (Rs.) |
105.92 |
115.13 |
148.46 |
136.52 |
142.75 |
151.51 |
|
Return on Equity (%) |
4.81% |
8.00% |
22.45% |
3.05% |
4.36% |
5.78% |
How much to apply?
The total shares floated by Union Life Insurance Company Limited is 6,450,000 units, of which only 5,805,000 units are available to the general public after the allocation of shares to staff and mutual funds.
If we see the recently concluded IPO of previous issued IPO's, a total of more than 20 lakh applicants applied for the company IPO and we assume that the same or even more craze prevails in Union Life's IPO too. Since the 10 kitta rule exists for IPO; 5,80,500 applicants will be lucky enough to get the shares of Union Life Insurance Company Limited.
Hence, if the same number of applicants (or more) who applied for the previous IPO apply for this issue then there is a high probability of lottery for 10 units. Since the minimum unit is 10, it is advisable to apply only 10 units in the IPO issue of Union Life Insurance Company Limited.
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