Eight companies seek Sebon nod for IPO

Sat, Apr 13, 2013 12:00 AM on IPO/FPO News, Others,

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KATHMANDU, APR 13 -

Eight companies have applied to the Securities Board of Nepal (Sebon) for its approval to do their initial public offering (IPO). The IPOs have a combined worth of Rs 1.45 billion.

Among the eight companies, seven are banks and financial institutions (BFIs) and one is a hydropower company — Mega Bank, Mission Development Bank, Small Farmers’ Development Bank, Rural Microfinance Development Centre (RMDC), Manaslu Development Bank, Mount Makalu Development Bank, Samriddhi Development Bank and Sanima Mai Hydropower Company.

Almost all the companies are planning to IPO by the end of the current fiscal year. Mega Bank’s IPO, which is scheduled to be held by April-end, is worth Rs 699 million.

The bank recently launched an IPO savings account with the aim of assisting prospective subscribers.

RMDC, which is involved in the microfinance sector, has planned to issue shares worth Rs 280.08 million.

The company, which has been providing wholesale lending to microfinance institutions, is also expected to attract a large number of investors due to its encouraging financial performance in the past several years.

According to Sebon, Manaslu Development Bank has planned an IPO worth Rs 36 million.

Similarly, Mission Development Bank is planning to do an IPO worth Rs 30 million, Mount Makalu Development Bank Rs 6 million and Samriddhi Development Bank Rs 30 million.

Likewise, Small Farmers’ Development Bank has planned to issue shares worth Rs 60 million. The bank in which the government also has a stake has been providing services all over the country.

Meanwhile, stock traders have expressed doubts about the response to the IPOs.

Anjan Poudel, past president of the Nepal Stockbrokers’ Association, said potential buyers had started showing concern over the performance of the companies.

Poudel said that investors now look at the financial records of the institutions doing an IPO before purchasing stock.

“Now investors are also showing concern over the mergers that are going on between many B and C class financial institutions while contemplating buying stock,” he added.

Sanima Mai is the only company from the real sector among the applicants for Sebon’s approval.

Its planned IPO is worth Rs 211 million. According to Sebon, the company is at the final stages of receiving the go-ahead. As per a source

at Sebon, it could happen within a week.

Sanima Mai is constructing a power plant with a capacity of 22 MW in Ilam district. The company will allocate shares worth Rs 105.5 million to the local people from nine village development committees in the affected area.

Poudel said that the IPO of a hydropower company may attract subscribers as the sector has been described as a national level priority.

Meanwhile, Sindhu Bikas Bank and Jhimruk Development Bank have recently been okayed to issue their primary shares.

Sindhu Bikash Bank has planned to do an IPO worth Rs 49 million. Jhimruk, a hydro project based in Pyuthan district, is scheduled to issue shares worth Rs 16 million.

UPCOMING IPOs