Kathmandu, July 6: IME Life Insurance has opened the issue of 96,00,000 unit shares to the general public from today i.e. on Ashad 21, 2080BS.
The shares will be issued for Rs. 236.91 per share (Rs 100 face value + Rs 136.91 premium price) to the general public and for the employees of the company at a par value of Rs. 100.
The issued capital of the life insurance company is Rs. 4 Arba of which 30% i.e. 1,20,00,000 unit shares is for the public (Nepalese citizens working abroad and the general public). Out of this total issue, 10% i.e. 12,00,000 unit shares were allocated for Nepalese citizens working abroad, whereas 5% i.e 600,000 units have been set aside for the employees of the company and 5% of the total offered shares i.e. 600,000 units have been set aside for the mutual funds. The remaining 96,00,000 units are for the general public.
Civil Capital Market is appointed as the issue manager. The IPO issue will raise a total of Rs. 2.76 Arba for the company. Out of this Rs 1.56 Arba will be the premium amount and the rest would add to the paid-up capital. The current paid-up capital of the company is Rs. 2.80 Arba.
Capital Structure:
| Authorized Capital | 5,000,000,000 |
| Issued Capital | 4,000,000,000 |
| Current Paid-Up Capital | 2,800,000,000 |
| Capital after IPO Issuance | 4,000,000,000 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 28,000,000.00 | 2,800,000,000.00 | 70% | Already issued |
| General Public (Including Nepalese citizens working abroad) | 12,000,000.00 | 1,200,000,000.00 | 30% | To be issued |
Uses of Funds:
| S. No. | Particulars | Amount |
|---|---|---|
| 1 | Government Bond | Rs. 11.55 Crores |
| 2 | Fixed Deposit | Rs. 1.91 Arba |
| 3 | Corporate Debentures | Rs. 56.30 Crores |
| 4 | Initial Public Offerings | Rs. 6.93 Crores |
| 5 | Mutual Funds | Rs. 3.62 Crores |
| 6 | Hydropower Projects | Rs. 5 Crores |
| 7 | Branch Expansion | Rs. 80 Lakhs |
| Total | Rs. 2.76 Arba | |
Board of Directors:
| Name | Position |
|---|---|
| Dr. Ram Hari Aryal | Chairman |
| Mr. Deep Chandra Regmi | Director |
| Usha Dhakal | Director |
| Mr. Binod K.C | Independent Director |
Financial Highlights:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/80 (Q3) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital (‘000) | 1,400,000.00 | 1,400,000.00 | 1,400,000.00 | 2,800,000.00 | 5,000,000.00 | 5,000,000.00 | 5,000,000.00 |
| Reserve & Surplus (‘000) | – | – | – | – | – | – | – |
| Share Premium (‘000) | – | – | – | 497.00 | – | – | – |
| Contingent Fund (‘000) | 44,063.00 | 73,448.00 | 103,986.00 | 122,231.00 | 141,829.00 | 190,213.00 | 252,738.00 |
| Accumulated Fund (‘000) | 213,175.00 | 295,268.00 | 406,917.00 | 572,941.00 | 630,286.00 | 994,888.00 | 1,493,187.00 |
| Other Reserves (‘000) | 180,406.00 | 366,401.00 | 560,477.00 | 564,432.00 | 1,239,221.00 | 1,308,016.00 | 1,373,435.00 |
| Net Premium (‘000) | 1,414,183.00 | 2,897,477.00 | 3,549,518.00 | 2,818,969.00 | 4,723,232.00 | 6,018,832.00 | 7,687,396.00 |
| Net Profit (‘000) | 198,623.00 | 296,239.00 | 325,353.00 | 193,313.00 | 378,433.00 | 483,836.00 | 625,251.00 |
| Earnings per share (Rs.) | 14.19 | 21.16 | 23.24 | 9.21 | 7.57 | 9.68 | 12.51 |
| Net worth per share (Rs.) | 131.26 | 152.51 | 176.53 | 145.00 | 140.23 | 149.86 | 162.39 |
| Return on Equity (%) | 1.26 | 1.68 | 1.66 | 0.57 | 0.61 | 0.77 | 0.98 |
Credit Rating:
CARE Ratings Nepal Limited (CRNL) has reaffirmed the rating of ‘CARE-NP BBB (Is)’ assigned to IME Life Insurance Company Limited. Issuers with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations, in Nepal.
Key Rating Strengths:
- Association with strong promoter group experienced board and management team.
- Moderate financial risk profile supported by the growing scale.
- Adequate geographical coverage through branches and sub-branches.
- Adequate reserve and reinsurance arrangement.
- Improving trend in solvency ratio in FY22.
- Good assets quality of investment book.
Key Rating Weaknesses:
- Short track record and competition from other insurance companies coupled with a relatively small market share in the life insurance industry.
- Deterioration in combined ratio marked by an increase in claims ratio.
- Exposure to Regulatory Risk.
