Kathmandu: The issuer’s credit rating of Sun Nepal Life Insurance has been reaffirmed by the credit rating agency Care Rating Nepal. Care Rating Nepal has reaffirmed the issuer’s credit rating ‘Care NP-BBB-(Is)’ for it’s proposed IPO issue.
According to Care Rating Nepal, the companies with such rating have moderate safety of the timely fulfillment of financial liabilities.
To raise additional capital, the company is mulling to issue IPOs at a premium price. A company that has been profitable for last three consecutive financial years, can issue IPOs with premium.
Sun Nepal Life has increased the paid-up capital to Rs. 2.24 billion with 60 percent rights shares issued to its existing promoter shareholders. Earlier, the total paid up capital was Rs 84 crore. The company must maintain at least Rs. 5 billion paid-up capital by the end of Chaitra 2079. Sun Nepal’s board of directors and top-level management are under pressure as they have to almost double their paid-up capital in a short span of time.
The net profit of the company has increased by 141 percent to Rs. 215 million in last FY 2078/79. It’s gross insurance premiums income also increased by 44 percent to Rs. 2.71 billion in the last FY. Out of the total gross premium income, 64 percent has been collected through renewal premiums while 20 percent from foreign employment insurance.