Promoter shares of NIB, Nepal Aawas Finance fail to woo investors

ShareSansar, September 18:

Despite an all-out effort of the Rastriya Banijya Bank Ltd to divest the crossholding of the Nepal Investment Bank Ltd and Nepal Aawas Finance Company Ltd through auction, the investors have shown a little interest towards buying the promoter shares of these two institutions.

Just 19 percent of total promoter shares of the NIB have been subscribed by the investors while it was only 10 percent subscription of Nepal Aawas Finance.

According to RBB officials, 11.89 lakh units out of 62.2 lakh units of NIB promoter shares worth Rs 62.9 crore were subscribed in the bidding which closed on Tuesday. Similarly, 20,000 units of promoter shares out of 198,497 units of Nepal Aawas Finance worth Rs 21.1 lakh were subscribed in the bidding.

RBB’s treasury department chief Bhupendra Pandey said that the promoter shares were undersubscribed mainly due to the psychological fear among the investors amid slowdown of the secondary market. “NIB announced the dividend. Though we tried to allay the fear, the investors also feared that the book closure will also announce soon which will dampen their hope of getting the dividends,” he added.

Pandey informed that the allotment of the shares will be held within a week so that the new buyers will be able to get the dividend announced by these two institutions.

According to Pandey, they will start the process of auctioning the remaining shares soon. “The bidding of the remaining shares will be opened soon. The price will be adjusted as per the market price,” he said.

“Some institutional investors who want to hold shares on long run are watching the market movement and they may buy if the current volatility of the secondary market comes back to normal situation.
Also, we hope that the shares will be oversubscribed in next lot as these sold shares will also be started trading in the market easily which encourages other doubting the easy tradability to buy the shares,” he added.