Subsidiary Company
Siddhartha Capital Limited
At a Glance
Siddhartha Capital Limited (SCL) is the subsidiary of Siddhartha Bank Limited (SBL) registered under Company Act, 2063, with 51 percent promoter shareholding of the Bank.
Established in 2012, the company has emerged as a key player in the Nepalese capital market,
providing a range of financial services to institutional and individual clients. Siddhartha
Capital Limited offers a variety of services, including Issue Management Services, Underwriting
Services, Portfolio Management Services, Depository Participant Services, Registrar to Shares
Services and Corporate Advisory Services.
Siddhartha Capital Limited, is licensed to operate as a Depository Participants (DP) and is
providing the DP related services to its customers through the branches of Siddhartha Bank
Limited (SBL) and its corporate and representative offices. Moreover, SCL has been granted
permission by SEBON to act as a Qualified Institutional Investor (QII) and participate in
securities issued through the book-building process.
Siddhartha Capital Limited (SCL)
was the first institution in Nepal to be granted an operating license to administer mutual
funds. SCL has contributed significantly to the growth of the mutual fund industry in the
nation. The company’s mutual fund management division manages various mutual fund schemes,
providing investors with access to diverse investment opportunities and asset classes.
clients.
The company has a team of experienced professionals with expertise in diverse fields, including
finance, investment and research. ICRA Nepal has reaffirmed the Fund Management Quality Rating
(FMQR) of AMC Quality 3+ for SCL, indicating adequate assurances on management quality, the
company’s established track record in fund management, strong market presence and financial
profile.
Siddhartha Capital Limited is a trusted and reputable fnancial institution in
Nepal, committed to providing innovative and personalized financial solutions to its clients.
Vision
To be a leading institution in providing investment
banking services in the country
Mission
Be an upstanding corporate citizen that contributes
to the society and economy by
delivering
maximum benefits to clients and shareholders.
Objective
To become the merchant bank of first choice
is the main objective of the company.
Strategy
help deliver outstanding results for all the clients.
Client Focus
- Offer investment options at the lowest cost possible
- Offer simple products that are attractive and easy to understand
- Deliver reasonable, risk adjusted returns over long terms
Approach
- Disciplined research and investment process
- Efficient risk management systems
- Achieving long term goals with continuous focus on every detail
Sustainability
- Ethical and dependable services
- Sustainable relations
- Corporate Social Responsibility
What We Do
The major activities of the company are issue management, portfolio management services, underwriting of securities, securities trustee, registrar to shares, corporate advisory, fund management & depository services in a mutual fund, depository participant services in a central depository service etc. Each business type is represented below.
1. Merchant Banking
Siddhartha Capital Limited obtained license for commercial operation as a Securities Businessperson (Merchant Banker) from SEBON on Jestha 28, 2072. The company has successfully provided a variety of merchant banking services for the past ten years. Each business type is represented below.
A. Issue Management
Siddhartha Capital Limited offers services to corporate clients that wish to generate funds by making public offering of their stocks, bonds, and debentures in the primary market. Siddhartha Capital Limited assist and ensure that those services are endowed with optimum quality and precision at reasonable and affordable prices. SCL has already performed the role of lead issue manager in the issuance of various Initial Public Offerings (IPO), Further Public Offerings (FPO), New Fund Offer (NFO), Right Share Issue and Bonds/ Debentures issues.
B. Underwriting Services
Siddhartha Capital Limited assists corporate clients in the issuance of new securities in the market with the assurance of subscribing to the shares offered to the public as an underwriter. With a capital base of NPR 200 million, a strong parent company back up, and an asset backup under its management, SCL has the potential to underwrite securities significantly, allowing it to manage public offerings efficiently.
C. Registrar to Shares
Siddhartha Capital Limited acts as trustees and managers for individuals and businesses by providing custody of their securities. Siddhartha Capital Limited also maintains an up-to-date database of these companies’ shareholders. Siddhartha Capital Limited ensures that all shareholders receive their dividends on time, handles all share transfers, transfers shares to the appropriate demat accounts, issues share certificates, and provides any other related services. Siddhartha Capital Limited guarantee shareholders hasslefree services in the shortest amount of time with the best service delivery.
D. Depository Participant
Siddhartha Capital Limited has been providing DP services since obtaining the status of
Depository Participant under the CDS Regulation 2010 and is a market leader in doing so,
operating over 340,000 Beneficiary Ownership (BO) accounts.
Siddhartha Capital Limited’s
market leadership and satisfied customers attest to their unrivaled dedication and expertise in
serving the Nepalese capital market and its participants.
E. Corporate Advisory Services
Siddhartha Capital Limited provides business consulting services to both private and public entities in pursuit of business excellence; and the services are driven by the clients’ needs in order to achieve their organizational objectives and goals. In general, the services will include restructuring of organization, business and project valuation, business plan development, loan syndication, asset management, working capital financing, company conversion, etc.
2. Portfolio Management Services
SCL has proven its fund management efficiency by successfully managing its mutual fund schemes. Our PMS clients are served by a team of dedicated and experienced professionals. Our experts use their talent and experience to create a portfolio that is tailored to the client’s needs and attitude in order to maximize the return. We aim to relieve clients of the administrative burden of managing their own investments through our services.
3. Mutual Fund Management
Siddhartha Mutual Fund is the first mutual fund registered with Securities Board of Nepal (SEBON) to conceptualize and issue mutual fund schemes as per the Mutual Fund Regulation of 2010 where Siddhartha Bank Limited is the fund Sponsor and Siddhartha Capital Limited is the Fund Manager and Depository.
Since then, SCL has successfully managed to float closed-end Mutual Fund Schemes worth NPR 5 billion in the market. The fund manager i.e. SCL has successfully redeemed two of its mutual fund schemes; Siddhartha Investment Growth Scheme – 1 (SIGS1) and Siddhartha Equity Oriented Scheme (SEOS), both being a 5-year close-ended scheme with a basic fund size of NPR. 500 million and NPR. 1 billion providing an annual return of 48.5% and 13.60% respectively.
Currently, Siddhartha Capital Limited is successfully operating Siddhartha Equity Fund (SEF), Siddhartha Investment Growth Scheme 2 (SIGS2), Siddhartha Investment Growth Scheme 3 (SIGS3) and Siddhartha Systematic Investment Scheme (SSIS) under Siddhartha Mutual Fund. Siddhartha Equity Fund with base size of NPR 1.50 billion is successfully operating for the past 5 years and Siddhartha Investment Growth Scheme 2 with base size of 1.20 billion is operating for the last 3 years. Similarly, Siddhartha Investment Growth Scheme 3 with base size of 805.9 million is operating from the last year and Siddhartha Systematic Investment Scheme, which started with initial base size of 200 million is successfully operating for last 2 year and the fund size has grown to 454.2 million as of mid-July 2023. Siddhartha Equity Fund, Siddhartha Investment Growth Scheme 2 and Siddhartha Investment Growth Scheme 3 are traded in secondary market after being listed in NEPSE. The Siddhartha Systematic Investment Scheme, however, only permits trading through Siddhartha Capital Limited.
The Siddhartha Equity Fund and Siddhartha Investment Growth Scheme 2 has distributed dividend of 5% including tax worth NPR 75 million and 6.5% including tax worth NPR 78 million respectively out of their profits for FY 2022-23. As of mid-July 2023, the Net Assets Value (NAV) of Siddhartha Equity Fund, Siddhartha Investment Growth Scheme 2, Siddhartha Investment Growth Scheme 3 and Siddhartha Systematic Investment Scheme remains at NPR 10.53, NPR 10.69, NPR 10.31 and NPR 9.00 respectively.
All the schemes aim to provide a regular and balanced return over the scheme period while focusing on the highest possible capital appreciation at the end of the maturity. The efficiency of the scheme management is reflected through the Net Asset Value (NAV) and consistent dividend payments.
SCL Performance
The company’s balance sheet size has witnessed an exponentialgrowth over the past few years with its current net worth per share standing at NPR 245.42 as onmid-July 2023. Theperformance of SCL seems satisfactory during FY 2022-23.During FY 2022-23, SCL has earned net profit of NPR 62.38million compared to the net profit of NPR. 56.22 million earnedin FY 2021-22. SCL is able to earn a total income of NPR. 191.25million in FY 2022-23 vis a vis NPR. 193.71 million earned in FY2021-22 and total expenses was NPR. 101.26 million in FY 2022-23vis a vis NPR. 113.35 million in FY 2021-22. The heavy fall of NEPSEindex has negatively impacted the profit of the SCL during theyear. Despite of it, Siddhartha Capital Limited has managed todistribute 25% cash dividend including tax to its shareholdersfrom its current year’s profit. The major indicators of financialperformance of SCL has been presented below:
During the FY 2022-23, the company has managed IPO of 6 companies of issue size approx. NPR 5.23 billion (including 1 bond issuance and 1 mutual fund issue). The company has been appointed as Registrar to Share (RTS) of 19 various companies including 4 mutual fund and 1 debenture. Siddhartha Capital Limited have total of 386,216 DP clients and 337,003 Meroshare accounts operated by CDS as of mid-July 2023.
Till date, SCL has provided issue management services worth over NPR 47.23 billion for 57 companies, comprising of Initial Public Offerings (IPO), Further Public Offerings (FPO), New Fund Offers (NFO), Right Share issuance etc. SCL has also issued public offerings across a variety of sectors including commercial banks, development banks, life and non-life Insurance companies, hydropower, manufacturing, mutual fund, and microfinance.
Previous Section