Nepal · July 8, 2021 0

Things To Know Before Fill Union Life Insurance IPO. EPS , Net worth and Paid up Capital

About Union Life Insurance IPO .

Union Life Insurance has opened IPO sale from Thursday (July 8).

The company has sold 6.45 million shares at the rate of Rs 100 per share.Of this, 5% (322,500 lots) has been allocated for employees and 5% (322,500 lots) for mutual funds.The general public will be able to apply for the remaining 5.8 million lots.Applications can be made for a minimum of 10 lots and a maximum of 32,250 lots in the IPO.

Applications for this IPO can be submitted till July 11. The company has stated that the application will be open till July 22 if all the IPOs are not sold at that time.Applications can be submitted through C-ASBA. Prabhu Capital is the sales manager in this IPO.

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

 

Rating

Credit rating agency ICRA Nepal has given ‘ICRNP IR BBB’ rating to Union Life. This indicates that there is an average risk in the company’s ability to bear financial obligations. ICRA gave the rating on May 17, 2021. This rating will remain valid until May 16, 2022.

How many shares to fill?

Recently, the number of investors applying for IPO has reached more than 2 million.A total of 2,087,317 investors had applied for the IPO of Jeevan Vikas Microfinance, which was distributed on Wednesday.

Similarly, 2 million 36 thousand 245 people have applied for the IPO of Manakamana Smart Microfinance, which was closed on Monday (July 7).Therefore, based on the applications received in the past, the investors have to rely on luck to get the shares of Union Life.

The company has opened 5.8 million lots for the public.On this basis, even if the distribution is done at a minimum rate of 10 lots, only 580,500 investors will get the IPO.Therefore, it seems to be enough to apply for 10 lots in the IPO of Union Life.

However, the company has made arrangements to apply for a minimum of 10 lots and a maximum of 32,250 lots.

Company details

Union Life Insurance Company Limited is a company established under the Companies Act, 2063 BS and licensed to conduct insurance business in accordance with the Insurance Act, 2049 BS and Insurance Regulations, 2049 BS.

The registered office of this company is Siddharthnagar Municipality Ward no. 8, is in Rupandehi.The main place of business is Kathmandu Municipal Corporation ward no. 10. New Baneshwor is in Kathmandu.

Union Life has been doing insurance business since September 19, 2074 BS.At present, the insurance company is providing insurance services from 204 offices including various branches and sub-branches.

Things To Know Before Fill Union Life Insurance IPO. EPS , Net worth and Paid up Capital

Projected earnings per share for the last three years after three years of operation and projected earnings per share and net worth per share for the next three years after three years.

As per the need, with the approval of the concerned body, the branch and sub-branch office can be established in the country.

Use of funds From IPO

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

 

Capital structure and financial projection

The authorized capital of Union Life Insurance is Rs 2.15 billion and the issued capital is Rs 2.15 billion.Out of the issued capital, Rs 1.5 billion has been paid by the founding shareholders.The remaining IPO worth Rs 645 million is about to be issued.

After the IPO, the paid-up capital will reach Rs 2.15 billion.After the IPO sale, the founder’s share in the company will be 70% and the general share will be 30%. Union Life has projected to earn a net profit of Rs 89.5 million by the end of the current fiscal year.

The structure of the paid-up capital of the organization prior to the initial public offering (corresponding in case of grouping)

Similarly, it is estimated to earn a profit of Rs. 133.9 million in FY 2078-79 and Rs. 188.32 million in FY 2079-80. The company has no immediate plans to raise capital. The capital of Rs 2.15 billion is projected to remain the same after the IPO sale till FY 2079-80. Meanwhile, earnings per share is projected to reach Rs 4.17 by the end of the current fiscal year.

Similarly, earnings per share is estimated to reach Rs 6.23 in FY 2078-79 and Rs 8.76 in FY 2079-80. At the end of the current fiscal year, the net worth of this insurance is estimated to reach Rs 136.52 per share and Rs 142.75 in the fiscal year 2078-79.

Location of equipment (plant) and other property of the organization and condition of equipment and property

Management and basic shareholders

Manoj Kumar Lal Karna has assumed the responsibility of the Chief Executive Officer of Union Life Insurance.Karna has studied till graduation.

Karna has worked in the insurance sector for more than 20 years.He has worked at the top management level of non-life and life insurance companies, the company said.So far, the company has 13 basic shareholders.

Out of which, Shekhar Golchha holds 3 million shares and Shahil Kumar Agrawal holds 3 million shares.Similarly, Shulabh Agrawal has held 2.715 million shares.Currently, the company’s board of directors includes chairman Shulabh Agrawal, Seema Golchha, Sandeep Kumar Agrawal, Jeevan Kumar Agrawal and independent expert director Devi Prasad Sharma.

 

Financial Status :

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%