No interest on the refund amount of FPO from Shikhar Insurance

No interest has been provided to the applicants in the refund amount of the FPO of Shikhar Insurance Co. ltd. (SICL). Generally, an  IPO provides up to 2 percent interest rate on the refund amount.

ShareSansar took this issue  with the issue manager of the FPO, NIBL Capital Market Lttd.

An official with  NIBL Capital Market Limited said, “Huge amount was collected (more than Rs 43 arba !) in IPO of HIDCL and  there is higher liquidity with the BFIs. Banks are not receiving any institutional deposit at the present time. We deposited the money at Nepal Rastra Bank and Nepal Rastra Bank does not provide any interest on the deposit. As we did not get any interest on the amount collected from FPO, we were not able to provide interest to the applicants. This practice is well within the guideline of SEBON”

Shikhar Insurance had floated its FPO from Mangsir 17,2072 to Mangsir 21, 2072.FPO collected Rs. 4 arba 39 crore (Oversubscribed by 13.23 times) from total 17,161 applications.

Allotment for investors who had applied from Rs 6,500 or 10 units to Rs 19,500 or 30 units shares on Small investors category and from Rs 52,000 or 80 units to Rs 1,17,000 or 180 units on Other/ Big investors category was decided through lottery and remaining investors who had applied for Rs  26,000 or 40 units to Rs 45,500 or 70 units were allotted 32.5 % to 31.42 % on pro-rata basis. And the other investors applied for Rs 1,23,500 or 190 units to Rs 6,50,00,000 or 1,00,000 units were allotted 5.26 % to 4.90 % on pro rata basis.

Of the total 5,10,988 unit shares set aside for public, 40% or  2,04,395 shares, were put aside for retail investors and 60% or 3,06,593 shares, under “other investor” category.

Of the total 17,161 applicants’ only 17,152 investors got the shares. There were only 9 invalid applicants.

At present Promoter and ordinary shareholders share structure in the insurance company stands at 80:20 ratios. After the FPO, promoter and ordinary shareholders share structure will be at 70:30 ratios.

SICL has announced a 25% stock dividend from the profit of last fiscal year. The FPO investors will also be entitled to the bonus share.