Best Life wants to go public to raise Tk15 crore

KEY POINTS OF THE IPO

• Best Life will raise Tk15 crore

• The IPO will be held under the fixed price method

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• 1.5 crore ordinary shares will be issued at a face value of Tk10 each

• The money will be invested in government treasury bond and FDR

• Prime Bank Investment will be the issue manager of the IPO

Best Life Insurance 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.

The firm wants to raise the fund by issuing 1.5 crore ordinary shares at a face value of Tk10 each.

It wants to use the fund to invest in the government treasury bond and fixed deposit receipts (FDR), and to meet IPO-related expenses.

Prime Bank Investment recently signed an agreement with Best Life to provide issue management services.  

Best Life decided to raise capital after getting an exemption from the Bangladesh Securities and Exchange Commission (BSEC).

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.

Best Life is a fourth-generation life insurance company established on 20 August, 2013. It has been in life insurance pension and health business since its incorporation. 

It offers various life insurance policies that fulfil the requirements of the company's present and prospective policyholders.  

According to the company's 2019 financial statement, its gross premium was Tk18.97 crore. During that period, its life insurance fund amounted to Tk4.45 crore while gross fund was Tk22.45 crore.

At the same time, its total asset was Tk29.41 crore.

There are 78 companies in the insurance sector of Bangladesh. Of them, 32 are life insurance and 46 are non-life insurance. 49 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.

Data by Swiss Re Institute, a leading global reinsurer, shows overall insurance penetration in Bangladesh stood at a meagre 0.57% in 2018 – 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 5.27% in Thailand in 2018, followed by 4.77% in Malaysia, 4.22% in China, 3.70% in India, 2.42% in Vietnam, 1.95% in Indonesia, 1.82% in The Philippines, and 1.15% in Sri Lanka.

Taiwan had the highest penetration rate of 18%.