Asian Life Insurance to go Public from October 27

Asian Life Insurance Company is floating 10,80,000-units -- worth Rs 108 million -- of primary shares at a face value of Rs 100 per unit from October 27.

"After this public issue worth Rs 108 million the paid-up capital of the company will be Rs 360 million," said the company that has Rs 252 million paid-up capital at present. Of the total issue, 43,200-units are meant for the staff of the company. Contrary to other public issues, the company has allowed people to apply for minimum 10-units also and one can apply for a maximum of upto 20,000-unit.

One must apply with a passport size photo. After complaints about fake applications, Securities Board of Nepal (Sebon) has made it mandatory to apply with photo and bank account number for the primary issue.

The regulatory authority of the capital market permitted the company on September 16 to go public and the Company Registrar's Office gave the go-ahead on October 8.

NIDC Capital Markets is the issue and sales manager of the insurance company that has -- according to unaudited accounts -- posted Rs 3.32 million profit in the fiscal year 2008-09. The company has projected Rs 15.29 million profit for this fiscal year. According to its prospectus, it is not going to give any dividend for another three years.

Asian will be the 18th listed insurance company in Nepse as there are already 17 listed insurance companies -- under Nepse's insurance companies sub-group -- with a total of 20,703,504-unit shares at Rs 100 face value making a total total paid up worth Rs 2,070,350,400.

However, their contribution is negligible -- around only one per cent -- in the total trading in the secondary market. The increase in the listed insurance companies in the secondary market might boost their contribution in the days to come.

In the fiscal year 2007-08, there were only 21 insurance companies but in 2008-09 the number increased to 25.

According to Nepal Rastra Bank, in the fiscal year 2008-09, the total paid-up capital of listed companies stood at Rs 61.1 billion -- an increase of 107.5 per cent in comparison to the fiscal year 2007-08.

This increase was due to the additional listing of securities. In the increased amount, the portion of rights shares was 30.7 per cent, bonus shares 6.3 per cent and ordinary shares 63 per cent. Comparatively, Nepse was flooded by rights shares as these increased by 55 per cent while bonus shares increased by 31 per cent and ordinary shares by 14 per cent.

Nepse listed 37 companies' bonus shares worth Rs 1924.77 million, 50 companies' rights share worth Rs 9307.8 million and 14 companies' ordinary shares worth Rs 19087.5 million in the last fiscal year, according to the central bank.

Meanwhile, a la Asian Life Insurance, Prime Life Insurance is also gearing for its public issue soon.