IPO of Union Life Insurance Company Limited

There are 19 life insurance companies in Nepal. Union Life Insurance Company was established in 2074 B.S under company Act 2063 and insurance Act 2049. Jagadamba group, Golcha Group, Gadiya group, and other reputed business houses have the major investment in union life insurance. Also, It is a solo Nepalese life insurance company limited. Firstly, providing services with total security is the mission statement of union insurance. Likewise, becoming the big life insurance company of Nepal in terms of premium income, a number of policies, profit, and a high rate of return to its shareholders are the main goal of this insurance company.

Union Life insurance is collaborating their reinsurance with Nepal Re-Insurance Company Limited and Ocean Re-Insurance. There is four-person in Board of Director including the chairman. Also, they have 17 members of a dynamic and well-known management team.

Financial Performance

Financial indicators are true benchmarks to investors to invest in companies. Union life insurance started its journey from 2074/06/04 BS in the Nepalese insurance business. They started making a profit in 2075 BS. The major financial indicators are highlighted below:

S.NHeading2076/0772077/078Estimated 2078/79
1Paid-up-capital1,505,000,000.002,150,000,000.002,150,000,000.00
2Reserve656,455,070.00706,679,170.00827,233,520.00
3Outstanding Shares15,050,00021,500,00021,500,0000
4Net worth per Share148.46136.52142.75
5Earnings Per Share33.334.176.23
6Paid-up value100100100
7Net worth Return22.45%3.05%4.36%

This insurance company can give good returns to its shareholders in the future. So, union insurance is good for long-term purposes.

Ownership Structure

Shareholder TypesNumber of SharesPercentage of OwnershipAuthorized Amount (RS)
Promoter Shares15,050,00070%1,505,000,000.00
General Public6,450,00030%6,45,000,000.00

IPO Details

Currently, many life and non-life insurance companies are issuing their shares to the general public in terms of IPO. Here, all the IPO details of Union Life Insurance Company Limited are as follows:

IPO Open Date                                        :           2078 Ashad 24

IPO Close Date    (Early)                           :           2078 Ashad 28

IPO Close Date    (Late)                            :           2078 Sharwan 07

IPO for Union Life Insurance Employee      :           3,22,500 Shares

IPO for Mutual Funds                                :           3,22,500 Shares

IPO for General Public                              :           58,05,000 Shares

Total amount of Shares                             :           Rs 64,50,00,000

ICRANP Rating                                       :           BBB” (Moderate Safety Regarding Timely Servicing of Financial Obligations)

Price Per Share                                         :           Rs 100

Issue Capital                                            :           Prabhu Capital Limited

How to Apply?                                        :           Through Mero share and C-ASBA

In the last 1 year, IPOs in Nepal are oversubscribed. In every IPO more than 2 million people apply for general shares. Low risk with high profit is the major reason for being IPO oversubscribed. So, I recommend all the investors to apply for 10 Kitta.

Investment Strategy

Union life Insurance will collect the amount of Rs 64.5 crore by issuing IPO. They already made the proper portfolio plan for those amounts. They are going to invest in the following areas:

S.NInvestment HeadingPercentageAmount
1Nepal government’s Debenture/ Development Debenture25%161,250,000
2Fixed Deposit in Commercial Bank40%258,000,000
3Fixed Deposit in Development Bank15%96,750,000
4Fixed Deposit in Finance Companies10%64,500,000
5Stock of public Limited company10%64,500,000

Conclusion

Finally, Union Life Insurance company Limited has good paid-up capital and promoted by well-known business houses of Nepal. Also, they have a profitable insurance policy, and they insured by the safest re-insurance company. Therefore, many people will apply for this share, and it is going to be oversubscribed. So, it will be allotted by lucky draw.

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