NIDC Capital Markets Insight Analysis by JMI
13, Jan 2012

Introduction

Name:                         NIDC Capital Markets Ltd.

Catagory:                    Class "C" Financial Institution

Business:                     Banking

Date of Operation:      28.10.2049

Chairman:                   Mr. Shivajee Roy Yadav

CEO:                          Mr. K. H. Rana            

Head Office:               Moti Marg, Kamalpokhari, Kathmandu.

Scrip ID:                     NCM (Nepse)

 

Ownership Pattern

Promoter Shareholding:          54.60%

Public Shareholding:               45.40%

 

List of some Prominent Shareholders


Name                                                                      Shareholding (%)

1.      Nepal Industrial Dev. Corp.                                                   45.04%           

2.      National Productivity & Economic Devt. Centre                     5.00%

3.      National Life and General Ins. Co. Ltd.                                  3.50%

4.      Rastriya Beema Sansthan                                                       0.50% 

5.      Nepal Red Cross Society                                                      0.50%

6.      National Investment Fund                                                      0.82%

7.      Sonam Gyacho                                                                      3.21%

8.      Narayan Bhakta Shrestha                                                      1.16%

9.      Indra Bahadur Thapa                                                             1.11%

 

Equity Analysis

52 Week high price: Rs. 425

52 Week low price: Rs. 151

Last trading price(03.01.2012): Rs.170

Paidup Capital: Rs. 22.2356 Cr.

Market Capitalization: Rs. 37.80 Cr.

EPS(annualized): Rs. 23.86

P/E Ratio: 7.123

Net worth per share: Rs. 193.24

Price to book value: 0.88

NOTE: Value of EPS and NWPS are taken from the unaudited 1st Quarter report 2068/69.

 

Key Statistics

 

Particulars                   F/Y 067/68     F/Y 066/67      F/Y 065/66      F/Y 064/65      F/Y 063/64

Paidup Capital (Cr.)     22.2356           17.0978           13.1522           10.1170           7.49412

Deposits (Cr.)              143.188           133.93             129.144           99.952             62.258

Borrowings (Cr.)          46.00               36.00               13.00               6.00                 5.00    

Net interest                 9.355               13.0866           8.226               4.424               5.752

Income  (in Cr.)                      

Fee/Comm./Disc.        31.81               68.07               69.046             47.061             49.33

(in Lakhs)

Other Operating          1.424               3.461               2.302               2.252               4.697

Income (in Cr.)

Net Profit (Cr.)             6.45                 10.128             6.99                 4.36                 3.64

 

Key Findings

1.      Based on F/Y 2067/68 comparision among 71 Finance Companies listed in Nepal stock exchange, NIDC ranks as follows:

Head                                                            Rank

Ø  M-Cap (Oct. 2011)                                             25th

Ø  Deposit                                                                23rd

Ø  Total Assets                                                         18th

 

2.      NIDC is the first company to undertake merchant banking activity in Nepal. All types of merchant banking activities are performed through its subsidiary company "NCM Merchant Banking Ltd." In terms of number of issues handled, the company ranks number one among all Merchant banks in the Country. The key merchant banking activities of NCM Merchant Banking Ltd. are as follows:

-          Issue managment

-          Portfolio managment

-          Mutual fund

-          Investment advisory

 

3.       The board composition of the company constitute a total of nine directors with three participating from public shareholders.

 

4.      There is a moderate exposure of lending in real-estate sector and is gradually decling in latest quarter.

Period                                      % of Real-estate lending to total Lending

            Q3 2067/68                             22.66%

            Q4 2067/68                             15.31%

            Q1 2068/69                             13.83%

 

5.      The Company has been constantly distributing healthy returns to its shareholders since last seven years in form of dividends and bonus shares.

 

Particulars                   F/Y 067/68     F/Y 066/67      F/Y 065/66      F/Y 064/65      F/Y 063/64

Dividend (in %)            20%                 15%                 10%                 5%              6%

Bonus Share (in %)      5%                   30%                 30%                 30%             35%

Despite  slow growth in size of business, the company appears a bit defensive as compared to other peers and its stock can be taken as a good dividend stock.

 

Note: 20% Cash Dividend and 5% bonus share for F/Y 2067/68 is proposed one and shall be final subject to approval by AGM to be held on 29/09/2068.

 

6.      Figure of profit for F/Y 2067/68 and the profit of first Quarter of F/Y 2068/69 has declined as compared to the same period in the corresponding previous F/Y.

Period                    recent period(Rs.)                   Corresponding previous period(Rs.)

1st Quarter            1.39 Lakhs                               1.1555 Cr.

Annual Profit         6.4473 Cr.                                10.0162 Cr.

During first quarter 2068/69, it can be observed that interest expenses is higher than interest income thus resulting in operating loss of Rs. 1.275 Cr.          Inspite of this huge operating loss, the company is able to book positive profit because of writing off of provision for possible loss(six times greater than that of previous period) and with additional support of good volume of net non-operating income.

Fall in profit for F/Y 2067/68 is also due to higher interest expenses as compared to previous period. This can be conformed by the fact that the cost of fund in these two periods is in excess of 12% and for the first quarter of F/Y 20687/69, the interest income has dropped by 31.82% as compared to previous years' reporting period where non performing loan rose from 4.22% to 7.64%.


 

 




Source:
Jamb Market Insights (JMI)
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