Investors show passiveness in the ongoing auction of NCC Bank’s promoter shares; Falls far behind in comparison to Bank of Kathmandu’s promoter share auction
Sun, Feb 25, 2018 12:56 PM on Latest, Exclusive, Dividend, Bonus & Rights, Featured, Stock Market,
The auction of 70 lakh unit promoter shares of NCC Bank has been ongoing since Magh 18, 2074. Its closing date was set on Falgun 3, 2074 but after receiving low participation from the investors the closing date has been extended to Falgun 30, 2074. The bid will be opened on Chaitra 1, 2074 to conclude the auction at 11 A.M.
The minimum bid price for the auction has been set at Rs 210 per unit and the investors can apply for minimum of 100 unit of shares. Also, the investors can deposit 5% of the total bid amount in the name of CBIL Capital in Citizens Bank International Limited. CBIL Capital has been appointed as the issue manager for the auction.
The auction has not been able to garner significant interest among investors. 70 lakh unit shares is a huge block of shares as it represents 15% stake in Nepal Credit and Commerce Bank. Still the participation of the investors in the auction is far from being good.
If we have to compare the auction of the promoter shares of NCC Bank, recently Bank of Kathmandu had also auctioned 61.58 lakh unit promoter shares. The auction was open from Mangsir 22 to Mangsir 29. But unlike the ongoing auction, the auction of BOKL had witnessed huge participation in which 961 bidders had submitted their bids. Employees Provident Fund had got hold of 61 lakh unit of shares at Rs 251.
The promoter shares of NCC Bank also have a lot to offer than just the shareholding of the bank. The bank is set to provide 50% right shares to its shareholders. Apart from that, there is an expected bonus of 15% for the shareholders. And eventually the effective cost of the shares will turn out to be Rs 150.
But despite all these possibilities, the auction has not amassed the investors’ attention like it was supposed to. The reason for the passiveness of the investors could be the exponential rise in the interest rates of the banks and financial institutions as well as shortage of investable funds in the market, say the market observers.
Auction date extended
The auction has not been able to garner significant interest among investors. 70 lakh unit shares is a huge block of shares as it represents 15% stake in Nepal Credit and Commerce Bank. Still the participation of the investors in the auction is far from being good.
If we have to compare the auction of the promoter shares of NCC Bank, recently Bank of Kathmandu had also auctioned 61.58 lakh unit promoter shares. The auction was open from Mangsir 22 to Mangsir 29. But unlike the ongoing auction, the auction of BOKL had witnessed huge participation in which 961 bidders had submitted their bids. Employees Provident Fund had got hold of 61 lakh unit of shares at Rs 251.
The promoter shares of NCC Bank also have a lot to offer than just the shareholding of the bank. The bank is set to provide 50% right shares to its shareholders. Apart from that, there is an expected bonus of 15% for the shareholders. And eventually the effective cost of the shares will turn out to be Rs 150.
But despite all these possibilities, the auction has not amassed the investors’ attention like it was supposed to. The reason for the passiveness of the investors could be the exponential rise in the interest rates of the banks and financial institutions as well as shortage of investable funds in the market, say the market observers.
Auction date extended
