Primary share investors had a lot to
choose from as the number of primary issues offered this year was three
times more than the initial offerings in last fiscal year.
The capital market will see Initial Public Offerings (IPOs) of 18 financial institutions, one insurance firm and one hydropower firm before the fiscal year ends. The IPOs will offer about 300 million unit shares worth Rs 3.8 billion.
The year started with Khandbari Bikas Bank’s public issue worth Rs 15 million and will now end with Rural Microfinance Development Centre (RMDC)’s IPO that will be issuing 1.56 million shares with premium price of Rs 180.
Securities Board of Nepal (Sebon) has given a green signal to the public issue of 21 companies, debenture issues of seven commercial banks, and two mutual fund issues.
Moreover, this year’s IPO market was flooded with three large offerings of commercial banks worth Rs 2.09 billion that were overwhelmingly subscribed. Mega Bank Nepal that offered shares worth Rs 699 million saw its IPO oversubscribed by 22 times.
Likewise, offerings of Civil Bank and Commerz and Trust Bank were also oversubscribed by seven and 12 times, respectively. Though investors were eager about large offerings, a few financial institutions were not very fortunate.
Bright Development Bank and Jebils Finance had to extend the offering period to get fully subscribed.
“Investors are wary of purchasing shares of smaller and regional development banks and finance companies as investors are not assured that they will fare well in the long run,” said acting president of Nepal Investors’ Forum Raj Kumar Timilsina.
Last year, Bhargab Bikas Bank’s promoters and underwriters had to pitch in due to lukewarm participation of investors. Likewise, the underwriter of Lotus Investment Finance — Civil Capital — refused to buy shares that were unsubscribed. Sebon might allow the underwriter to get away with not fulfilling its obligations and annul the IPO.
“Investors do not want to buy shares of financial institutions that are rushing into an IPO just to fulfil their regulatory capital requirement, so they are also planning carefully,” added Timilsina.
IPOs hold a special place in any investor’s portfolio as it provides investors to purchase shares at face value which can be easily traded at double the amount following the listing at the stock exchange. For rookie investors, IPOs are supposed to be the best investment before getting into secondary share trading.
The emergence of a credit rating agency has also helped investors decide on whether or not to subscribe a certain company’s IPO. ICRA Nepal has already rated the offerings of RMDC and Sana Kisan Bikas Bank that will be open before end of current fiscal.
Source: THT
The capital market will see Initial Public Offerings (IPOs) of 18 financial institutions, one insurance firm and one hydropower firm before the fiscal year ends. The IPOs will offer about 300 million unit shares worth Rs 3.8 billion.
The year started with Khandbari Bikas Bank’s public issue worth Rs 15 million and will now end with Rural Microfinance Development Centre (RMDC)’s IPO that will be issuing 1.56 million shares with premium price of Rs 180.
Securities Board of Nepal (Sebon) has given a green signal to the public issue of 21 companies, debenture issues of seven commercial banks, and two mutual fund issues.
Moreover, this year’s IPO market was flooded with three large offerings of commercial banks worth Rs 2.09 billion that were overwhelmingly subscribed. Mega Bank Nepal that offered shares worth Rs 699 million saw its IPO oversubscribed by 22 times.
Likewise, offerings of Civil Bank and Commerz and Trust Bank were also oversubscribed by seven and 12 times, respectively. Though investors were eager about large offerings, a few financial institutions were not very fortunate.
Bright Development Bank and Jebils Finance had to extend the offering period to get fully subscribed.
“Investors are wary of purchasing shares of smaller and regional development banks and finance companies as investors are not assured that they will fare well in the long run,” said acting president of Nepal Investors’ Forum Raj Kumar Timilsina.
Last year, Bhargab Bikas Bank’s promoters and underwriters had to pitch in due to lukewarm participation of investors. Likewise, the underwriter of Lotus Investment Finance — Civil Capital — refused to buy shares that were unsubscribed. Sebon might allow the underwriter to get away with not fulfilling its obligations and annul the IPO.
“Investors do not want to buy shares of financial institutions that are rushing into an IPO just to fulfil their regulatory capital requirement, so they are also planning carefully,” added Timilsina.
IPOs hold a special place in any investor’s portfolio as it provides investors to purchase shares at face value which can be easily traded at double the amount following the listing at the stock exchange. For rookie investors, IPOs are supposed to be the best investment before getting into secondary share trading.
The emergence of a credit rating agency has also helped investors decide on whether or not to subscribe a certain company’s IPO. ICRA Nepal has already rated the offerings of RMDC and Sana Kisan Bikas Bank that will be open before end of current fiscal.
Source: THT
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