Lumbini General Insurance Company Limited (LGIL) has received [ICRANP] IPO Grade 3 from credit rating agency ICRA Nepal to its proposed 20% right share issue. The grade indicates average fundamentals. The company plans to issue 20% right share i.e. 17.6 lakh units at a unit price of Rs 100. It will raise Rs 17.6 crore if the right share issue is fully subscribed. After the right share issue, the paid-up capital of the company will reach Rs 1 arba meeting the minimum capital requirement of the Insurance board. The LTP of LGIL stood at Rs 427 as of 4th August 2019.
Below is a company profile from ICRA Nepal:
Lumbini General Insurance Company Limited (LGIL), operating since July 2005, is among the younger players in Nepal’s general insurance industry. LGIL is a medium-sized player with ~6% share in industry GPW and ~7% share in industry NPW in FY2018. As of mid-April 2019, the company was in operation with 42 branches across the country for procuring business and extending after-sales services. The paid-up capital and net worth of the company as of mid-April 2019 was NPR 880 million and NPR 1,659 million, respectively. LGIL has 51:49 promoter-public shareholding ratios. Major shareholders as of mid-April 2019 included M/s. Lumbini Bikash Bank Limited (~10%), Mr. Manohar Das Mool Technical reserve includes (reserve towards unpaid claims & unexpired risk); restricted reserves include Insurance reserve and Insurance fund appropriated from annual profits. The industry comprises of 17 non-life insurers, including two Indian foreign branches, viz. Oriental Insurance and National Insurance, and one JV of Sagarmatha Insurance with Ceylinco Insurance PLC, Sri Lanka. Lumbini is the 15th player to be licensed by the Insurance Board of Nepal. (~10%), M/s. Nepal Himalayan Trade Company Pvt. Ltd (~6%), Mr. Shankar Ghimire (~4%) and Mr. Suraj Vaidhya (~4%). LGIL reported a profit after tax of NPR 233 million during FY2018 (NPR 179 million in FY2017) over an asset base of NPR 2,544 million as of mid-July 2018 (NPR 1,762 million in mid-July 2017). During 9M FY2019, the company reported PAT of NPR 149 million over an asset base of NPR 2,703 million on mid-April 2019.