Chartered Life wants to raise Tk15cr through IPO
The firm wants to raise the fund by issuing 1.5 crore ordinary shares at a face value of Tk10 each.
- The insurer wants to raise the fund for business expansion
- Gross premium was Tk31.13 crore at the end of 2020
- Total asset was Tk47.55 crore
- Life insurance fund was Tk21.60 crore
- It decided to apply for IPO after getting an exemption from the BSEC
Chartered Life Insurance Company Limited wants to raise Tk15 crore from the stock market to strengthen its business.
The company will collect this fund through an initial public offering (IPO) following the fixed price method. It has recently applied to the Bangladesh Securities and Exchange Commission (BSEC) in this regard.
The firm wants to raise the fund by issuing 1.5 crore ordinary shares at a face value of Tk10 each.
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Out of Tk15 crore, the company will invest Tk6 crore in the government treasury bonds, Tk4 crore in listed securities in the capital market and Tk3.9 crore in fixed deposit receipts (FDR). It will also meet the IPO-related expenses from this fund.
Chartered Life decided to raise capital after getting an exemption from the commission.
Under the new facility, insurance companies can apply to the securities regulator for IPOs aiming to raise less than Tk30 crore.
The lowest bar for raising capital through IPOs is now Tk15 crore for insurance companies.
The commission stipulated that insurance companies, which have less than Tk30 crore paid-up capital, must invest at least 20% of their equity in the capital market if they want to get listed.
AAA Finance & Investment Ltd, Trust Bank Investment Ltd and AB Investment Ltd are jointly working as issue managers of the company's IPO process.
Chartered Life is a fourth-generation life insurance company established on 29 July, 2013.
It offers various life and health insurance policies, hospitalisation coverage, maternity and outpatient coverage that fulfils the requirements of the company's present and prospective policyholders.
According to the company's audited financial statements for 2020, its gross premium was Tk31.13 crore and the net premium was Tk30.87 crore. During that period, its life insurance fund amounted to Tk21.60 crore.
At the same time, its total asset was Tk47.55 crore while the investment was Tk32.68 crore.
As of 31 December, 2020, the company's net asset value was Tk13.39.
There are 78 companies in the insurance sector of Bangladesh. Of them, 32 are life insurance and 46 are non-life insurance. Fifty insurance companies are listed on the stock exchanges.
Experts have been saying for a long time that Bangladesh is one of the most untapped insurance markets in terms of penetration rate.
Awareness and a strong culture of insurance service behind economic activities can help the industry thrive.
According to the Swiss Re Group, a leading global reinsurer, the overall insurance penetration in Bangladesh stood at a meagre 0.49% in 2019 – the lowest among emerging Asian countries.
The penetration rate is measured as the ratio of premium underwritten in a particular year to the GDP.
Insurance penetration was 4.99% in Thailand in 2019, followed by 4.72% in Malaysia, 4.30% in China, 3.76% in India, 2.24% in Vietnam, 1.99% in Indonesia, 1.72% in the Philippines, and 1.25% in Sri Lanka.
Taiwan has the highest insurance penetration rate of 19.97% and Hong Kong 19.74%.
