IPO Alert : General Insurance Company Nepal Limited

 

General Insurance Company Nepal Limited is issuing 3,000,000 units of ordinary shares to the general public from 11th Ashwin 2077 i.e from tomorrow. Let us go through the company fundamentals before applying for the Initial Public Offering of General Insurance Company Limited.

About the Issue:

The Company is issuing 3,000,000 units of ordinary shares to the general public from 11th Ashwin 2077.

About the Company: 

General Insurance Company Nepal limited is a non-life insurance company. The company has a range of non-life insurance products for Fire, Marine, Motor, Engineering, Agriculture etc. The company started its operation from June 20, 2018 with its registered office at Hattisar, Kathmandu-1, Nepal. The Company has network of  39 branches including Head Office with support by 178 employees and 171 insurance agents as of Mid January 2020.

Capital Structure:

Board of Directors:

Board of Directors Consists of the following members:

• Kunal Kayal - Chairman
• Mr. Ram Chandra Khanal- Director
• Shashi Raj Bajracharya- Director
• Krishna Bohora- Director
• Dipendra Agrawal- Dierector

Management Team:

Management Team Consists of the following members:

1. Mil Baraily- Chief Executive Officer
2.  S.K. Tamot- General Manager
3. Rajesh Prasad Manandhar- Deputy General Manager
4. Binesh Maskey- Assistant General Manager
5. Nil Baraily- Assistant General Manager

Financial Highlights:

* Unaudited Figures

Rating:

Care Rating Nepal has assigned the "CARE-NP BB+ (IS) " rating to IPO of the company. Such rating is considered to have moderate risk of default regarding timely servicing of financial obligations in Nepal.

Key Rating Strength:

• Strong Promoter Group
• Experienced board and Management Team
• Diversified investment with fair return.

Key Rating Weakness:

• Relatively small market share in the non-life insurance industry
• Moderate financial risks profile with high expense ratio
• Concentration in motor segment
• Solvency ratio lower than the regulatory requirements

Opening Price Range:

As per the latest audited report of the company, net worth per share is NPR 101.76. The lowest range shall be the net worth per share itself while the highest range shall be 3 times of the net worth per share. Therefore it is likely to get the opening price range of NPR 101.76-305.28 when listed in NEPSE.

How much to apply for:

After allocation of 4% and 5% to employees and mutual fund respectively 2,730,000 units shall be available for the general public.

Total of 4,98,649 applications were received for IPO of Ajod Insurance while a total of 589,464 applicants applied for recent IPO of Reliance Life Insurance.   From the given trade we can assume that same or even more craze can prevail in IPO of General Insurance Company Nepal Limited. If the same number or even more applicants apply for the IPO then  273,000 applicants will be lucky enough to get 10 shares of General Insurance Company Limited.

Therefore it is advisable to apply for 10 units.