Janata Bank IPO receives good response

Mon, Apr 30, 2012 12:00 AM on IPO/FPO News,

KATHMANDU, APR 30: 

After a two-year hiatus, the capital market witnessed an Initial Public Offering (IPO) of a commercial bank with Janata Bank’s primary issue starting today. 

“The response from the public is quite good and 

we expect to get all the issue subscribed within four days as estimated,” said Bhisma Raj Chalise, CEO of Civil Capital –– one of the three issue managers for Janata Bank’s IPO.

The bank has appointed Citizen Investment Trust (CIT), NMB Capital and Civil Capital as the underwriter and issue manager for the IPO worth Rs 600 million. The shares are available for the public at a face value of Rs 100 per unit share. This is the largest public issue by a private commercial bank. 

The last public offering by a commercial bank was in April 2010 of Agricultural Development Bank. As the secondary market was still going strong, the issue was oversubscribed by 150 times in just three days of the opening of the IPO. 

However, the continuous poor performance at the stock market has landed primary issues in a difficulty. Recent instances of IPOs of smaller development banks and finance companies hardly getting subscribed even in a month has cast a shadow on the reception of the bank’s public offering. The bank established two years back, is operating through 24 branches across Nepal. 

The bank has a paid up capital worth Rs two billion and has 836 promoters. By the end of the third quarter of the current fiscal year, the bank earned Rs 43.7 million as net profit and its non-performing loans stand at 0.03 per cent.

Source: THT