How much to bid in Janata Bank’s auction of 7.67 lakh units shares? Investors must adjust for its bonus shares

Janata Bank Nepal Limited (JBNL) has been auctioning its unclaimed ordinary and right shares to the general public from Chaitra 1 to Chaitra 15, 2073. Many investors interested in applying for the auction want to know how much should they bid for this auction since its trading has been suspended in NEPSE due to its merger process with Triveni Bikas Bank Limited (TBBL). There is a trend that the bidders who bid around 80% to 95% of the last closing price generally fall under cutoff. However, since this is an auction, investors should try to bid as low as possible. Bidding around market price or more than the market price is never sensible. There is a huge chance that many investors will bid more than what is considered optimal bid price. Accounting for bonus share The last traded price of JBNL stands at Rs 387 per share before its trading was stopped in NEPSE. However, JBNL has already distributed 12% bonus share after this. Accounting for this bonus, its market price will be adjusted to Rs 345. So, bidders should make this as the base price for auction. Normal bid price is 10% to 20% less than the last closing price. So, Rs 276 to Rs 310 per share is a normal bid range for this auction of JBNL.