Sarbottam Cement has concluded the issue manager signing ceremony today at Hotel Yak and Yeti, Durbarmarg, Kathmandu.
Book building is the process by which an underwriter attempts to determine the price at which an initial public offering (IPO) will be offered. An underwriter, normally an investment bank, builds a book by inviting institutional investors (such as fund managers and others) to submit bids for the number of shares and the price(s) they would be willing to pay for them. While 40% of the shares will be sold to institutional investors, 60% will be issued for the general public.
The company has proposed to issue an IPO worth 60 lakh shares. The company is certain that the final price will not be lesser than Rs. 750 per share. However, institutional investors (book builders) have yet to bid for the IPO. After institutional investors submit bids with a quoted price for 40% of the shares (24 lakh units), the remaining 46.66% (28 lakh units) will be issued to the general public and 13.33% (8 lakh units) to the project affected people at 10% lesser than the quoted price.
Representatives from the company were present at the ceremony. The ceremony featured a short video introduction about the company along with a brief description from various post-holders.
Further, a representative from SEBON, the regulatory body, also provided a brief explanation of the Book Building Process. It was revealed that this is a move to attract real companies to the exchange so that the NEPSE index can give an accurate picture of the country's economy. The representative revealed that this was decided after the IPO issuance system at a premium price, which was introduced with the same purpose, failed to attract diverse sectors.
To the Right: CEOs of the three issue managers (issue manager Global IME Capital and co-issue managers NIBL Ace Capital and Prabhu Capital) sign the agreement.