NIDC closing bids for auction of 10.76 lakh units of Nabil promoter scrip today

ShareSansar, April 20:

NIDC Development Bank is closing the bids today for the auction of 10.76 lakh units of promoter shares of Nabil Bank Limited in a bid to end cross-holding of BFI scrips as directed by the central bank.

Inviting the bids on March 31, the state-run development bank has stated the minimum bid amount has been set at Rs 1,254, and that the interested applicants must bid for at least 100 units of the scrip.

The minimum bid amount is higher than the last traded price of Nabil’s promoter shares at NEPSE, which stands at 1,250.

The interested bidders must submit the closed bids at NIDC’s central office at Durbar Marg or its branches at New Road,  Biratnagar, Pokhara and Dhangadhi.

The tender bid form costs Rs 500 and the bidder must deposit at least 2.5 percent of the total bid amount in advance.

The bids will be opened in the presence of the bidders or their representatives within a few days, according to NIDC officials.

This is the fourth time NIDC is trying to auction the promoter shares of Nabil it has been holding for years now.

Though it tried to square off all the promoter shares in each of the earlier auctions, they could not woo enough bidders as investors complained that the minimum bid amount fixed by NIDC was high.

But a senior NIDC official told ShareSansar, they could not quote the minimum bid amount much lower than the existing market rate since it could "raise many eyebrows".

"We are a state-run institution, and so much so, that the Commission for the Investigation of Abuse of Authority has even directed us to appoint a focul person with regards to any major decision taken by us."

But many share investors are not convinced. They believe that NIDC is setting the minimum bid amount high on purpose so that the share auction becomes just formality by and large, and it can continue to reap benefit from the cross-holding.