Century Commercial Bank IPO allotment: 7.9% to small group, 3.09% to big ones; upto Rs 12k in lottery

The Initial Public Offering (IPO) worth Rs 92 crore issued by Century Commercial Bank Limited will be allotted on March 3 at the office of the commercial bank in Kathmandu, according to highly placed sources privy of the development.

The reliable sources also informed that the IPO allotment model is such that the IPO will be allotted at an impressive 7.90percent to retail investors who had applied up to Rs 50,00 and at  just 3.09 percent to big investors.

This means that the smaller investors will be benefitted more from the allotment as has been the policy of the regulator and the key stakeholders in the market.

“The allotment model has been designed in such way also because there were more applicants who applied for more than Rs 50,000,” one of the sources told.
“To explain with an example, those who had applied for Rs 50,000 will get 40 units of the shares while those who applied for, say, Rs 51,000 will get just 16 units.”

However, the sources further informed that those who had applied for up to Rs 12,000 who fall under lottery.

According to the issue manager, they are planning to distribute the allotment slips and refund the non-allottees will begin in five working days from the allotment (i.e. by March 9).

Century’s IPO was oversubscribed by 24.48 times.

The IPO, which was issued from January 9, had closed on January 13.

Century’s IPO was one of the most expected events in the stock market not just because of its sheer volume but also because it is the last IPO to be issued by any commercial bank of the country.

Nepal Rastra Bank has stopped issuing license to the commercial bank, and, on the contrary, has been directing the commercial banks and other BFIs to seek merger.
The offering was also special in that it was the largest IPO to be issued by any private bank in the country, second only to primary shares worth Rs 96 crore floated by Agriculture Development Bank Limited.

ICRA Nepal had assigned an ‘[ICRANP] IPO Grade 4+’ to Century Bank’s IPO, which is not at all bad by any standards.

Following the IPO, the commercial bank’s paid-up capital of Rs 1.08 billion will rise to Rs two billion, as per the regulatory requirement.

It may be noted that there was a huge response to the IPOs issued by three commercial banks — Civil Bank, Commerz and Trust Bank Nepal and Mega Bank—had issued their IPO over the last one year.

Civil Bank’s IPO was oversubscribed by seven times, Commerz and Trust’s IPO was oversubscribed by 11 times and Mega Bank’s IPO was oversubscribed by 22 times.-SSN