Reliance Spinning Mills Limited Closing 1,15,596 Units IPO Shares to Foreign Nepalese Immigrants From Today

Reliance Spinning Mills Limited is closing the issue of its IPO for foreign Nepalese Immigrants today, the 25th Mangsir 2082. The issue opened on the 22nd Mangsir, 2082.

Earlier, as per the guidelines, the company had issued its primary shares through the book-building process to Qualified Institutional Investors (QIIs) from 10th Magh to 14th Magh, 2080. The allotment, which occurred on 15th Magh.

In total, Reliance Spinning Mills is to issue 10.14% of its issued capital of Rs 1.90 Arba, i.e., a total of 19,26,600 shares. Out of which 40% i.e., 7,70,640 shares, were already issued and allotted to the Qualified Institutional Investors (QIIs), while the remaining 60% i.e, 11,55,960 shares, are to be issued later to the general public.

From the total of 11,55,960 units, of this public issue, 10% of the shares, totaling 1,15,596 units shares will be issued for Nepalese citizens working abroad. Later on, the remaining 10,40,364 units will be issued to the general public.

According to CDSC, 34,287 applicants have applied for a total of 19,52,470 units. Thus, the issue has already been oversubscribed by 16.89 times as of 5 PM yesterday.

Global IME Capital is appointed as the issue manager. Applications can be placed for a minimum of 50 units, with a maximum quantity of 20,000.

The share price of the company is Rs. 820.80 per share for common investors. The company is issuing an IPO through the book-building method.

Generally, the 'cut-off price' plays a pivotal role in IPOs issued under the book-building process. During the primary shares allotment to the qualified institutional investors, the 'cutoff price' for Reliance Spinning Mills was set at Rs 912. Following the guidelines, shares are made available to the general public at a reduced rate, specifically 10% lower than the 'cut-off' price. For Reliance Spinning Mills, this translates to Rs 820.80 per share for common investors.

After Sarbottam Cement Limited, this will be the 2nd company to issue an IPO under the book-building method in Nepal.

CARE Ratings Nepal Limited (CRNL) has continued to keep Reliance Spinning Mills Limited (RSML) under credit watch with developing implications. The company’s issuer rating of CARE-NP A- (Is), indicating adequate safety and low credit risk, remains unchanged. Similarly, CRNL has also maintained the same credit watch status for RSML’s long-term rating (CARE-NP A-) and short-term rating (CARE-NP A2+) for its bank facilities.

Reliance Spinning Mills Pvt. Ltd. was registered in the company registrar in the year 2051 B.S. With 4,300+ employees, Reliance Spinning Mills is the biggest of its kind in the country. The company manufactures Polyester, Viscous, and Acrylic yarn of international standard that is then exported worldwide, primarily to India and Turkey. The company has two manufacturing units located at Khanar, Sunsari, and Duhabi, Sunsari, Nepal. The total installed manufacturing capacity of the company is 40,680 MT per year as of mid-July 2021.