A new IPO is available for application in the Nepali share market. This time it's an IPO of a microfinance that can be applied from today. Manushi Laghubitta Sanstha Limited has issued IPO for general public from shrawan 27 till shrawan 31, 2078.
Company Information:
Manushi Laghubitta Bittiya Sanstha Ltd. (MLBSL) is a “D” class national level microfinance incorporated on June 24, 2018, licensed by Nepal Rastra Bank on October 11, 2018, and commenced operation on October 29, 2018. Thereafter, MLBSL took over the microfinance business conducted by the Manushi, an NGO established in 1991 and operating as a financial intermediary since April 2002 in Nepal. MLBSL is primarily engaged in providing microfinance loans based on the Joint Liability Group (JLG) model with each group consisting of a minimum of five members.
About the IPO of Manushi Laghubitta:
Manushi Laghubitta Sanstha Limited is issuing 393,750 units of ordinary shares worth Rs. 3.93 crores to the general public from Shrawan 27, 2078. The early closing date of this IPO issue is on Shrawan 31, 2078. If the issue is not subscribed till Shrawan 31, 2078 then the issue can be extended to Bhadra 09, 2078.
Out of offered 393,750 units; 0.5% of issue capital i.e., 5,469 units have been allotted for the employees of the company, and 5% of the total offered to the general public i.e., 19,688 units have been allotted for the mutual funds. The remaining 368,593 units are for the general public.
Applications can be placed for a minimum of 10 units and a maximum of 1,000 units.
Nepal SBI Merchant Banking Limited has been appointed as the issue manager for the IPO issuance.
After the IPO issue, public holding will be 36% and promoters holding will be 64%.
Also Read:
Why you should never miss any IPO?
CARE Rating:
CARE Ratings Nepal Limited (CRNL) has assigned the issuer rating of “CARE-NP B+ (Is) [Single B Plus (Issuer)]” to Manushi Laghubitta Bittiya Sanstha Limited (MLBSL). Issuers with this rating are considered to offer a high risk of default regarding timely servicing of financial obligations, in Nepal.
Key Rating Weakness
- Deteriorated assets quality on back of Covid-19 pandemic impact
- Subdued financial performance over the period marked with net loss during FY 20 and H1FY21
- Competition from other MFI’s and Co-operatives
- Inherent risk involved in the microfinance industry
- Exposure to regulatory risks related to the microfinance industry
Key Rating Strengths
- Backup from institutional promoters
- Experienced board members and management team
- Adequate capitalization is expected to improve after the proposed capital injection
- Moderate dependence of resource profile on Banks & Financial Institutions (BFI’s) borrowings
- Moderate growth in business over the period
- Moderate Liquidity Profile
Conclusion:
The total shares floated by Manushi Laghubitta Bittiya Sanstha Limited is 393,750 units, of which only 368,593 units are available to the general public after the allocation of shares to staff and mutual fund.
If we see the recently concluded IPO of Manakama Smart Laghubitta and Union Life, more than 21 lakh applicants applied for the company IPO and we assume that the same or even more craze prevails in Manushi Laghubitta Bittiya Sanstha's IPO too. Since the 10 kitta rule exists for IPO; 3,937 applicants will be lucky enough to get the shares of Manushi Laghubitta Bittiya Sanstha Limited.
Hence, if the same number of applicants (or more) who applied for the Manakamana Smart and Union Life’s 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 Manushi Laghubitta Bittiya Sanstha Limited.
Coming up IPOs in SEBON's pipeline.
Nyadi Hydropower Company Limited (NYADI)
Sahas Urja Limited (URJA)
Buddha Bhumi Nepal Hydropower Company Limited (BBHCL)
Samling Power Company Limited (SAMLING)
Terhathum Power Company Limited (TPCL)
Madhya Bhotekoshi Jalavidyut Company Limited (MBKHCKL)
Reliable Life Insurance Limited
Upakar Laghubitta Bittiya Sanstha Limited
River Falls Power Limited
