Source: Research Department, Prime Bank Investment Limited (PBIL). Email: research@pbil.com.bd

IPO Profile of Express Insurance Limited

Key Particulars of the IPO

Ticker EIL

Face Value (Tk.) 10

No. of Share (IPO) (40%) 26,079,000

No. of Pre-IPO Share (60%) 39,118,464

No. of Post-IPO Share 65,197,464

Issue Size (Offer Price) (Tk) 260,790,000

Pre-IPO Paid-up Capital (TK) 391,184,640

Post-IPO Paid Up(Tk) 651,974,640

Authorized Capital (Tk) 750,000,000

No. of Free Float Shares on Debut 26,079,000

%ΔYoY NPAT Growth (6m, Jun 30, 2020) 12.29%

Post-IPO EPS (6m, Jun 30, 2020) 0.50

Annualized EPS (12m, 2020) 1.0

NAVPs (as on Jun, 2020) 15.08

PE at Tk 10 (Post-IPO) 10

Company Overview

Express Insurance Limited (EIL) was incorporated in

March 30, 2000. The company does not have any hold-

ing or subsidiary company. It has to comply with the

rules and regulations directed by the Insurance Devel-

opment Regulatory Authority (IDRA). The chairman of

the company Md. Abdul Awal is an experienced busi-

nessman and holds vital positions in a number of com-

panies, he is also the managing director of a brokerage

house named Synthia Securities Limited which operates

in the Dhaka Stock Exchange. The company has a di-

verse client base including renowned local companies

like Waltion Hi-tech Industries Limited, D.B.L Group ,

National Feed Mills Limted, Edision Group, Stylecraft

Limited among others. The company does have any oth-

er placement shareholders other than the directors and

sponsors. They also have an automatic Reinsurance

arrangement with the state owned Sadharan Bima Cor-

poration, the only Re-insurance Corporation of the

Country .

Major Products of the Company

Name of Sponsors and Directors and Key Personnel

Name Position Post IPO

%

Syed Al Farooque Director 6.63 %

Farida Razzaq Director 6.02%

Khalilur Rahman

Choudhury Director 5.97%

Md. Abdul Awal Chairman 5.52%

ABM. Kaiser Director 5.10%

Shamsur Rahman Sponsor 4.77%

Amir Hamza Sarker Director 4.54%

Mohammad Younus Sponsor 4.39%

Marium Akhter Director 4.27%

Halima Harun Director 2.67%

Latiful Bari Director 2.10%

Mahfuza Younus Director 2.10%

Md. Mazakat Harun Sponsor 2.10%

Maj. Gen. Monzur Rashid

Khan (Rtd.) Director

Ayeasha Siddique Director

Maj. Anisur Rahman (Rtd.) Director

Fuad Latif Director

Abdur Rashid Managing Director

Total 56.18%

The principal services of Express Insurance Limited are:

1. Fire Insurance

2. Marine Insurance

3. Motor Insurance and

4. Miscellaneous Insurances

Directors holding positions in other listed companies

Name Position Position

Held

Md. Abdul Awal Mercantile Bank Ltd. Sponsor

Director

Halima Harun EXIM Bank Ltd. Sponsor

Director

Sonali Paper & Board

Mills Ltd Chairman

Mohammad Younus Shahjalal Islami Bank

Ltd. Directors

Ayeasha Siddiquee Jamuna Bank Ltd. Sponsor

Director

Source: Research Department, Prime Bank Investment Limited (PBIL). Email: research@pbil.com.bd

IPO Profile of Express Insurance Limited

Major Investments in Financial Assets

Ratio 2018 2017 2016 2015 2014

ROA 3.96% 4.30% 4.53% 5.47% 8.80%

ROE 5.99% 6.29% 6.64% 8.14% 13.46%

Net Operating Cash Flows Per Share

0.78 1.65 1.45 0.17 2.97

Operating Income Ratio

9.29% 6.13% 9.63% 11.5% 16.7%

Net Profit Ratio 10.7% 11.7% 12.8% 14.1% 20.4%

Financial Indicators

Revenue Breakdown

Implication Schedule of IPO Proceeds

Particulars Amount %

Government Treasury Bonds 20,000,000 7.67%

Mutual Funds 10,000,000 3.83%

Secondary Market

(A Category Listed Securities) 22,158,000 8.50%

Investment in FDR with

Nationalized Commercial Banks 193,632,000 74.25%

IPO Expenses 15,000,000 5.75%

Total 260,790,000 100%

Particulars Approximate period of project completion & commercial operation

Investment in capital market securities

Investment with in 3

months from the collec-

tion of IPO proceeds. Investment in FDR with

nationalized commercial banks

Within 3 months of

receiving the IPO fund.

Use of the Proceeds of IPO

Financing of IPO fund

Particulars % No. of Ordi-

nary Shares

Issue

price

Issue Amount

(Taka)

Eligible

investor

(EI)

EI 10% 2,607,900

10

26,079,000

Mutual

Funds

and CIS

30% 7,823,700 78,237,000

General

public

(GP)

GP 50% 13,039,500 26,079,000

NRB 10% 2,607,900 130,395,000

Total 26,079,000 260,790,000

Return on Assets & Return on Equity NPAT & NPAT Growth

129

134

109

112 13

8

107

141

176 18

7 203

121

91

72 74 74

0

50

100

150

200

250

2018 2017 2016 2015 2014

Revenue Break down in BDT (mns)

Fire Insurance Marine Insurance Motor Insurance

0.00%

2.00%

4.00%

6.00%

8.00%

10. 00%

12. 00%

14. 00%

16. 00%

20182017201620152014

ROA ROE

495

492

461

453

447

3141323031 2525252525

0

100

200

300

400

500

600

20182017201620152014

Investments in BDT (mn)

FDR Investment in shares National Investment Bond

43.8

4

46.7

7

49.2

6

56.5

1

85.7

9

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100. 00

20182017201620152014

Net profit after tax

Source: Research Department, Prime Bank Investment Limited (PBIL). Email: research@pbil.com.bd

IPO Profile of Express Insurance Limited

Key Observations

Post IPO total shareholding percentage of the compa-

ny’s sponsors and directors would stand at 56.18% .

The company sources of revenue income in 2018 was

quite evenly spread out between their primary forms

of insurance underwritings, namely Fire Insurance

(36%), Marine Insurance (30%), Motor Insurance

(34%).

Although underwriting profit increased by 34.6% on

YoY basis in 2018, it could be a cause for concern in

the coming years, as under writing profit dropped

from BDT 96.4 mn in 2014 to BDT 55. 23 mn in 2018.

During the last five financial years the company’s the

Net Profit after Tax has been on a downward trend,

falling from BDT 85.8 mn in 2014 to BDT 43.84 mn in

2018, representing a negative CAGR growth of 15.5%.

As the company’s lions share of underwriting premi-

ums are invested in the Fixed Deposits of commercial

banks, their future investment income could take a

significant hit when banks reduce their interest rate

on savings accounts in response to interest rate cap

set by the government.

The company has history of paying stable cash divi-

dend over the last four financial years, therefore in-

vestors could expect to earn a dividend income on

their investments.

The general insurance business faces a stiff competi-

tion as there over 48 companies, who are competing

for the share in a limited market space with similar

products and business model

Issue Date of Prospectus: March 10, 2020

Year End: Dec

Issue Manager: AAA Finance & Investment Limited, IIDFC Capital Limited, BLI Capital Limited

Auditors: Ahmed Zaker & Co.

Dividends Declaration

Disclaimer

Market PE 10.98

Sector (IT) 13.18

PE – FEDERALINS 18.93

PE – PRAGATIINS 11.54

Price relative to different prices

Other IPO Details

This Document/Report has been prepared and issued by Prime

Bank Investment Limited on the basis of the public information

available in the market, internally developed data and other

sources believed to be reliable. Whilst all reasonable care has

been taken to ensure that the facts and information stated in

the Documents are accurate as on the date mentioned herein.

If any person takes any action relying on this Document, shall

be responsible solely by himself/herself/themselves for the con-

sequences thereof any claim or demand for such consequences

shall be rejected outright by PBIL or by any court of law.

Price 15 22.5 25 27.5 30 33

PE 15 22.5 25 27.5 30 33

PE relative to other companies

Email: pbil.research@gmail.com

Contact: +8802-48810315-6

CORPORATE OFFICE

Tajwar Center (5th Floor)

House: 34, Road: 19/A, Block: E Banani, Dhaka-1213

Contact Us

Prepared by

Rahat-Ul-Amin Head of Research

Shakawat Hossain Research Analyst

Syed Reazul Haque Research Analyst

Year 2018 2016 2015 2017 2014

Cash (%) 10% 10% 12% 10% 0%

Stock (%) 0% 0% 0% 0% 20%