Ekata closes its IPO; oversubscribed by over 4 times in 3 days

Sharesansar, June 8:

Ekata Bikas Bank Limited has closed its Initial Public Offering (IPO) worth Rs 8 crore today, citing oversubscription of the issue.

The IPO, floated at a face value of Rs 100 per unit on June 4, has drawn over Rs 32 crore in three days, generating Rs 14 crore on Friday alone, according to NMB Capital, which is managing the issue.

Interested investors could apply for a minimum of 50 units and maximum of 1 lakh units among the total 8 lakh units, out of which 24,000 units have been set aside for the bank staff and another 40,000 for the mutual funds.

Securities Board of Nepal (SEBON) had granted approval to the IPO issue on May 13.

The development bank is in operation from May 15, 2011, since then it has always generated profits. The bank has collected Rs 1 arba 13 crore worth deposits and granted a total of Rs 95 crore loans and advances. The customer base of the bank has reached to 16 thousands.

Currently development bank headquartered in Butwal has two branches and nine service centers. The scope of operation is spread over three districts: Dang, Rupundehi and Kapilvastu.

The bank has also launched IPO saving accounts for the general public to ease the overall IPO application process.

As per the third quarter unaudited financial report of FY 2070/71, the bank has earned Rs 1.24 crore as compared to Rs 0.65 crore of the corresponding last fiscal year.

It may be noted that ICRA Nepal, the only credit rating agency in the country, has assigned an IPO Grade 4, indicating below-average fundamentals to the IPO.