Things to know for prospective investors about IPO of Nepal Infrastructure Bank Limited (NIFRA); IPO opens from today

Company Profile:

With a vision to be the nodal financial institution of the nation for infrastructure development, the bank started its commercial operation in March- 06, 2019. Nepal Infrastructure Bank Limited (NIFRA) is established as a National Level Infrastructure Development Bank with the focused objective of accelerating the development of infrastructure of the nation. The bank obtained the operating license from Nepal Rastra Bank on Feb-11, 2019. The bank focuses on infrastructure financing by raising resources from the domestic and international markets through equity, debt, mezzanine, and sector fund structures, issuing on-shore and off-shore bonds and debenture.

The bank was promoted by 41 promoters which include the Government of Nepal with 17% stake, Private sectors (35%), Life Insurance Companies (27%), Nepal Reinsurance Company Limited (4%), and individuals related to leading private business houses of Nepal.

As of 1st quarter of FY 2077/2078, the company reported a total interest income of Rs. 28.95 crores with a net profit of Rs. 18.01 crores. The company reported earnings per share of Rs. 6 and Net worth per share of Rs. 115.12.

About the Issue:

The company is issuing 8 crore units as IPO to the general public at the par value of Rs. 100 per share to raise a capital worth Rs. 8 Arba.

The company is set to issue a total of 8,00,00,000 units of shares from Magh-02, 2077. A total of 1,60,000 units i.e., 0.20% worth Rs, 1.60 crores is segregated for the employees of the company, and a total of 40,00,000 units shares worth 40.00 crores i.e., 5% of total units is segregated for a mutual fund. The remaining 75,840,000 unit shares are for the general public. The earliest closing date is Magh-06, 2077. If the issue is not subscribed till the earliest closing date then the issue will be extended till Magh-16, 2077.

NIBL Ace Capital Limited has been appointed as the issue manager.

Nepal Infrastructure Bank Limited
Total Capital100%200,000,00020,000,000,000
Total Issue to general public (IPO)40%80,000,0008,000,000,000
Employees0.20% of IPO Units1,60,00016,000,000
Mutual Fund5% of IPO Units40,00,000400,000,000
Issue ManagerNIBL Ace Capital Limited  
Issue Open DateMagh -02, 2077  
Issue Closing Date (earliest)Magh -06, 2077  
Issue Closing Date (late)Magh- 16,2077  
Minimum application10  
Maximum application20,000,000  

ICRA Rating:

ICRA Nepal has assigned as issuer rating of [ICRANP-IR] BBB pronounced ICRA NP issuer rating triple B) to Nepal Infrastructure Bank Limited.

Grading Strengths:

  • Strong ownership and seasoned management team
  • Positive demand outlook gave the need to reduce interest rate volatility in long-term project financing
  • Lean organization and lower operating cost could increase competitiveness on the lending front
  • Strong capitalization remains a comfort against probable credit shocks

Key Challenges:

  • The inherent risk in infrastructure financing and high concentration risk could lead to asset quality concern
  • Raising long-term funds at competitive rates remains a challenge
  • Challenges in scaling up credit portfolio could suppress medium-term profitability outlook

Board Members:

Board of Directors
Mr. Mr. Anuj AgrawalChairman
Mr. Shree krishna NepalDirector
Mr. Chandra Prasad DhakalDirector
Mr. Lalmani JoshiDirector
Management Team
Mr. Bhupendra PandeyOfficiating Chief Executive Officer
Mr. Surya Bahadur TamangDeputy General Manager-Business
Mr. Binaya Nath NeupaneDeputy General Manage
Mr. Suwarn Kumar SinghHead-Risk Management
Mr. Rabin ShresthaHead-Infrastructure Financing

The objective of IPO Issuance:

The objective of the Issue
Loan and AdvancesRs. 4,320,000,000
Other InvestmentRs. 3,680,000,000
TotalRs. 8,000,000,000

Capital Structure:

Capital Structure
Authorized Capital40,000,000,000
Issued Capital20,000,000,000
Current Paid-Up Capital12,000,000,000
Capital after IPO Issuance20,000,000,000

Shareholding Pattern:

Number of sharesAmountPercentageRemarks
Promoter Shareholders120,000,00012,000,000,00060%Already Issued
General Public80,000,0008,000,000,00040%To be issued

Financial Highlights:

Total Paid-Up Capital (‘000)6,000,000.0012,000,000.0012,000,000.0020,000,000.0021,600,000.0022,900,000.00
Reserve & Surplus (‘000)119,700.00788,971.001,634,826.002,299,345.002,276,052.002,931,272.00
Deposit from customers (‘000)0.00200,000.00250,020.121,000,000.003,000,000.009,565,000.00
Loan and Advances (‘000)0.0076,495.77575,356.3418,012,221.0029,446,976.0039,813,330.00
Interest Income (‘000)179,410.531,135,791.891,253,682.721,355,446.003,084,197.003,943,733.00
Interest Expenses (‘000)0.002,351.3723,018.5066,885.00602,413.00966,809.00
Operating Profit (‘000)161,249.04161,414.191,101,697.641,039,239.002,370,108.002,890,157.00
Net Profit (‘000)119,700.37669,270.30847,145.19725,217.001,656,705.002,020,220.00
Earnings per share (Rs.)
Net Worth per share (‘000)51.00106.57113.62117.69110.54112.8
Return on Equity (‘000)1.96%5.23%6.21%3.25%6.94%7.82%

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