39.49 crore unit shares halted from transaction in NEPSE due to ongoing M&A; more shares to be frozen if big merger is strictly implemented
Mon, Jul 8, 2019 5:28 PM on Exclusive, Stock Market, Latest,
The number of share which has been frozen for trading in NEPSE has reached 39.49 crores since Nepal Rastra Bank (NRB) has taken a strict stand-point on merger and acquisition. The central bank is taking a stick approach to persuade banks to merge when the more subtle strategies didn't bring the desired result.
Many Bank and financial institutions (BFIs) have been in the merger and acquisition process since 25th Jestha 2074 and before. Some BFIs have completed the M & A process. However, 22 companies listed on NEPSE for trading are still in process.
NEPSE halts the trading of those companies based on Merger and acquisition by-laws 2073. The stock market is an information sensitive area and when the companies are undergoing M&A any information may cause drastic movements in the price of the shares. Therefore, this by-law was passed to eliminate such occasions.
The table below gives the list of companies whose trading has been halted due to Merger and Acquisition.
| Last Day of Trading | Company Name | Listed Shares (Units) | Par value | Paid-up Capital(Rs) | Closing Price | Market capitalization(RS) |
| 7/7/2019 | Sahayogi Vikas Bank (SBBLJ) | 50,97,682 | 100 | 50,97,68,200 | 197 | 1,00,42,43,354 |
| 7/4/2019 | Global IME Bank (GBIME) | 10,31,05,159 | 100 | 10,31,05,15,900 | 295 | 30,41,60,21,905 |
| 7/4/2019 | Janata Bank (JBNL) | 8,00,08,858 | 100 | 8,00,08,85,800 | 214 | 17,12,18,95,612 |
| 7/4/2019 | Suryodaya Laghubitta (SLBS) | 10,79,190 | 100 | 10,79,19,000 | 793 | 85,57,97,670 |
| 7/4/2019 | Kailash Dev. Bank (KBBL) | 2,52,06,000 | 100 | 2,52,06,00,000 | 238 | 5,99,90,28,000 |
| 6/6/2019 | Lalitpur Finance (LFL) | 23,69,000 | 100 | 23,69,00,000 | 126 | 29,84,94,000 |
| 6/4/2019 | Kankai Bikas Bank KNBL) | 50,00,000 | 100 | 50,00,00,000 | 196 | 98,00,00,000 |
| 6/4/2019 | Aarambha Microfinance (AMFI) | 6,00,000 | 100 | 6,00,00,000 | 529 | 31,74,00,000 |
| 6/6/2019 | Chautari Laghubitta (CHLBS) | 18,60,000 | 100 | 18,60,00,000 | 464 | 86,30,40,000 |
| 5/21/2019 | Nepal Community Dev. (NCDB) | 53,16,580 | 100 | 53,16,58,000 | 145 | 77,09,04,100 |
| 5/19/2019 | Kalika Laghubitta (KMCDB) | 10,80,000 | 100 | 10,80,00,000 | 699 | 75,49,20,000 |
| 5/13/2019 | Mirmire Laghubitta (MMFDB) | 13,11,994 | 100 | 13,11,99,400 | 899 | 1,17,94,82,606 |
| 5/13/2019 | Nagbeli Laghubitta (NBBL) | 16,76,795 | 100 | 16,76,79,500 | 588 | 98,59,55,460 |
| 5/13/2019 | Kisan Microfinance (KMFL) | 8,97,970 | 100 | 8,97,97,000 | 830 | 74,53,15,100 |
| 5/16/2019 | NMB Bank (NMB) | 9,61,81,630 | 100 | 9,61,81,63,000 | 382 | 36,74,13,82,660 |
| 8/19/2018 | Om Dev. Bank (ODBL) | 2,51,52,000 | 100 | 2,51,52,00,000 | 197 | 4,95,4944,000 |
| 5/14/2019 | Bhargav Bikas Bank (BHBL) | 50,16,002 | 100 | 50,16,00,200 | 199 | 99,81,84,398 |
| 3/7/2019 | Womi Laghubitta (WOMI) | 10,10,880 | 100 | 10,10,88,000 | 1128 | 1,14,02,72,640 |
| 3/7/2019 | Jebil's Finance (JEFL) | 80,90,776 | 100 | 80,90,77,600 | 146 | 1,18,12,53,296 |
| 3/10/2019 | Purnima Bikas Bank (PURBL) | 52,50,000 | 100 | 52,50,00,000 | 188 | 98,70,00,000 |
| 7/10/2018 | Western Dev. Bank (WDBL) | 50,41,000 | 100 | 50,41,00,000 | 231 | 1,16,44,71,000 |
| 6/8/2017 | Sahara Bikas Bank (SHBL) | 7,30,000 | 100 | 7,30,00,000 | 460 | 33,58,00,000 |
| 3/14/2019 | Hathway Finance (HATH) | 30,00,000 | 100 | 30,00,00,000 | 116 | 34,80,00,000 |
| 1/17/2019 | Saptakoshi Dev Bank (SKDBL) | 52,37,650 | 100 | 52,37,65,000 | 122 | 63,89,93,300 |
| 3/17/2019 | Tinau Dev Bank (TNBL) | 56,77,670 | 100 | 56,77,67,000 | 166 | 94,24,93,220 |
| Total number of shares | 39,49,96,836 | Market capitalization | 1,11,72,52,92,321 | |||
| 1.11 Kharba |
On the basis of last traded price (LTP) of respective BFIs, the market capitalization amount stands at Rs 1.11 Kharba. This amount is equivalent to 7.15 percent of total market capitalization which stands at Rs. 15.52 kharba as on 23rd Ashadh 2076. NMB Bank (NMB) has the largest market capitalization of Rs 36 arba and its trade has been halted since Jestha 02, 2076.
Similarly, after the instruction of NRB, Global IME Bank and Janata Bank have signed preliminary agreement for merger, which has decreased the market capitalization by Rs 47.5 arba.
According to NRB, the big merger process will be promoted strictly and therefore more companies are likely to go for M & A, resulting in more shares being frozen from transaction on NEPSE. The longer the time taken for M & A process, the longer will the trading of these shares will be halted in NEPSE.
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