Incorporated in January 2018, as Manakamana Laghubitta Bittiya Sanstha Limited, the company started its operation in February 2018 as a licensed 10-district level class D microfinance institution. Later, the company merged with Smart Laghubitta Bittiya Sanstha and started joint operations from July 26, 2020, as a province-level (licensed to operate in Province 5) regional MFI in the name of Manakama Smart Laghubitta Bittiya Sanstha Ltd (MSLBSL). MSLBSL is promoted by 69 individual promoters engaged in different professions. Mr. Dev Singh Bista is the Chief Executive Officer of the company. The registered and corporate office of MSLBSL is in Siddharthanagar-5 Rupandehi, Nepal.

About the issue:

Manakama Smart Laghubitta Sanstha Limited is issuing 389,000 units of ordinary shares worth Rs. 3.89 crores to the general public from Ashad 17, 2078. The early closing date of this IPO issue is on Ashad 21, 2078. If the issue is not subscribed till Ashad 21, 2078 then the issue can be extended to Ashad 31, 2078.

Out of offered 389,000 units; 0.5% of issue capital i.e., 6,058 units have been allotted for the employees of the company, and 5% of the total offered to the general public i.e., 19,450 units have been allotted for the mutual funds. The remaining 363,492 units are for the general public.

Applications can be placed for a minimum of 10 units and a maximum of 1,000 units.

NMB Capital Limited has been appointed as the issue manager for the IPO issuance.

After the IPO issue, public holding will be 32.11% and promoters holding will be 67.89%.

ICRA Rating:

ICRA Nepal has assigned the issuer rating of [ICRANP-IR] BB- to Manakamana Smart Laghubitta Bittiya Sanstha Limited (MSBSL), indicating a moderate risk of default regarding timely servicing of financial obligations.

Key Strengths:

• Adequate Capitalization Profile
• Credit growth supported by branch expansion and merger
• Adequate presence in target geography and experienced management team

Key Challenges:

• Limited track record of operation
• Moderate asset quality
• Profitability profile subdued by limited economics of scale and ending rate ceiling
• Low penetration of credit bureau in Nepalese MFI sector
• Low share of deposits in the funding mix
• Regulatory Risk

The total shares floated by Manakama Smart Laghubitta Sanstha Limited is issuing 389,000 units, of which only 363,492 units are available to the general public after the allocation of shares to staff and mutual funds.

If we see the recently concluded IPO of previous issued IPO’s, a total of more than 20 lakh applicants applied for the company IPO and we assume that the same or even more craze prevails in Manakama Smart Laghubitta Sanstha Limited IPO too. Since the 10 kitta rule exists for IPO; 36,349 applicants will be lucky enough to get the shares of Manakama Smart Laghubitta Sanstha Limited.