10% NABILP fully converted to NABIL; No more NABILP tradeable shares available in NEPSE

The auctioned Nabil Promoter shares (NABILP) previously held by NIDC Development Bank has been converted into ordinary shares fully.

Unlike the promoter shares of other listed companies, Nabil Bank’s promoter shares were freely tradable and lucrative as well, as was eligible for an equal amount of dividend and other rights as the ordinary shares.Both the ordinary and promoter shares of the company had been trading for the last several years in the market under the symbols NABIL and NABILP. Investors usually hesitated to purchase promoter shares, however, promoter shares have been proved to be beneficial in case of NABIL Bank.

Going back to the root of this, we must consider the initial capital holding structure of Nabil Bank. Of the total paid-up capital, 50% is held by NB International, 10% by Rastriya Beema Company, 30% by ordinary shareholders through the IPO, and the remaining 10% percent NIDC Bank.

However, a few years back, when the Nepal Rastra Bank (NRB) issued a directive forbidding cross-holding of shares i.e. ownership of one bank by another bank, NIDC bank had to offload it’s 10% share via many rounds of share auctions to the general public.

Thus, the 10% share previously held by NIDC entered the market as Nabil promoter shares (NABILP) via auction. This share had similar rights as the ordinary shares and no restrictions that are generally associated with promoter shares.

Despite this fact, there was difference between NABIL price and NABILP price. The price gap was almost Rs 844 on 26th February, 2014, but the gap had decreased.

Then, on March 19, 2019 Nabil bank published a notice stating that the 10% NABILP shares will be converted into NABIL ordianry shares and any shareholder wishing to remain a promoter shareholder could submit an application to Nabil Bank.

Now, all the 10% shares have been converted into NABIL and are tradeable as NABIL. The remaining promoter shares of NABILP are not tradeable in NEPSE, therefore now you won't be able to place order in TMS to buy NABILP anymore. You will have to buy the NABIL shares, and finally no more confusion.