Manufacturing Companies Dominate Firms in SEBON’s Pipeline to Issue Premium IPOs

Companies from manufacturing and processing sector has dominated the list of companies seeking approval to offer initial public offerings (IPOs) at a premium rate from the Securities Board of Nepal (SEBON).

Out of the total 12 companies currently SEBON’s pipeline to issue premium IPOs, seven are from manufacturing sector, two from hydropower and others each and one from investment.  

Under the manufacturing category, Jagdamba Steels Limited has applied to issue 200,70,000 units at a premium of Rs 300.

Similarly, other companies which have applied for premium IPOs issuance include Shaurya Cement Industries Limited (159,81,500 units at Rs 264.51 each), Maruti Cements Limited (116,00,000 units at Rs 377 each), Riddhisiddhi Cement Limited (121,71,500 units at Rs 214.10), Ambe Steels Limited (111,92,727 units at Rs 303), Hulas Infra Limited (35,47,188 units at Rs 333.56), and Hulas Iron Industries Limited (97,50,000 units at Rs 255).

Similarly, from the hydropower sector, Century Energy Limited is in SEBON’s pipeline seeking approval to issue 300,000 units at a premium of Rs 275.11 and Numbur Himalaya Hydropower Limited seeks to float 30,06,202 unit at Rs 218.

Under the others sector, two companies--Kailash Helicopter Services Limited (350,000 units at Rs 327) and Chhaya Devi Complex Limited (14,37,500 units at Rs 400) are in SEBON’s pipeline.

Investment sector includes Shivam Holdings Limited seeking approval to issue 116,00,000 units at a premium of Rs 210 each.

Growing trend of premium IPOs

The trend of companies going public through IPOs is on the rise in recent times. Issuance of premium IPOs has gained momentum compared to previous years.  

Stock market analyst Ramhari Nepal welcomes the trend of deserving companies offering IPOs at a premium price. “It is positive when deserving companies go public through IPOs at premium, as it helps promote the capital market and contribute to overall economic growth,” he said.

He however cautioned that using IPOs as an exit plan for promoters is a bad practice. Regulatory bodies should be aware about it. Regulatory bodies must carefully assess whether a company genuinely deserves to issue IPOs at a premium rate, he suggested.

He also suggested that general investors should also be careful and avoid subscribing to IPOs of companies with weak financial performance.