Nagbeli IPO closes; draws over Rs 25 crore in 3 days

The Initial Public Offer (IPO) of 42,900 unit equity shares of Rs 100 face value floated by Nagbeli Laghubitta Bikas Bank Limted from December 8 has closed today. Though the applications are still being compiled, the IPO is likely to oversubscribed by around 150  times, according to concerned officials.

“In the first three days the IPO has drawn Rs 25 crore,” says an official with NMB Capital Market Limited, the issue manager of the microfinance development bank. “As most of the institutional investors have applied today, we expect the IPO to attract more money today then the previous days combined.”

Long serpentine queues could be seen throughout the office hours today in front of the centers where the IPO application forms were to be submitted.

Altogether 858 units have been set aside for the bank’s staff and 2,145 units to the mutual funds and the rest to the general public.

The applicants could apply for at least 50 units and up to 5,000 units.

The microfinance development bank based in Birtamod of Jhapa district has paid-up capital of Rs 1 crore 10 thousand, and its paid-up capital will rise to Rs 1.43 crore after the issuance of the IPO.

The bank’s promoters have 70 percent holding in the company as of now. As the end of the last fiscal year 2069/70, its EPS (annualized) stood at Rs 34.54, and its net worth per share at Rs 144.84.

Given the overwhelming response to the IPO issued by four microfinance development banks – Sana kisan, RMDC, Kalika and Naya Nepal — earlier this year as well as the fact that Nagbeli had issued only 42,900 units of equity shares, huge over subscription of its IPO was naturally expected.

Likewise, Cosmos Development Bank Limited, which has floated its IPO of 1.75 lakh unit equity shares of face value Rs 100, coinciding with the Nagbeli’s IPO, has drawn more than Rs 3 crore in the first three days of the issuance, according to the issue manager, Civil Capital Market Limited

The IPO is likely draw something around Rs 6 crore, i.e. it is likely to be oversubscribed by around four times by the time it closes tomorrow.

Altogether 3,500 units have been set aside for the bank’s staff and the rest to the general public.

The applicants must apply for at least 50 units and up to 10,000 units.

According to the unaudited fourth quarterly report of the development bank based in Gorkha, it had registered a net profit of Rs 2.39 in the first quarter of the current fiscal year compared to 152,640 in the corresponding quarter.

Its paid-up capital stands at Rs 2.62 crore and it has a negative reserve of Rs 46.86 lakh as its total loan loss provision to total NPL is as high as 158.93 percent.

Nonetheless, its NPL stands at 0.74 percent. After the issuance of the IPO, the development bank’s paid-up capital will rise to Rs 4.37 crore.
-sharesansar