Reliance Spinning Mills IPO Approved By Sebon, Company To Issue 1,155,960 Units Soon To General Public

Thu, Jun 27, 2024 8:02 AM on IPO/FPO News, Latest,

The Securities Exchange Board of Nepal (SEBON) has finally approved the IPO issue proposal of Reliance Spinning Mills Limited. The company will be issuing an IPO through the book-building method.

The company has permission to issue 1,155,960 unit shares to the general public at a bid price of NPR 820.80 each.

Earlier, as per the guidelines, the company had issued its primary shares through the book-building process to the Qualified Institutional Investors (QII) from 10th Magh - 14th Magh, 2080. The allotment of which happened on 15th Magh.

In total Reliance Spinning Mills is to issue 10.14% of its issued capital of Rs 1.90 Arba, i.e. a total of 19,26,600 shares. Out of which 40% i.e. 7,70,640 shares were already issued and allotted to the Qualified Institutional Investors (QIIs), while the remaining 60% i.e. 11,55,960 shares are to be issued later to the general public.

In general the 'cut-off price' serves as a pivotal factor in the IPO issued under the book-building process. During the primary shares allotment to the qualified institutional investors, the 'cutoff price' for Reliance Spinning Mills was set at Rs 912. Following the guidelines, shares are made available to the general public at a reduced rate, specifically 10% lower than the 'cut-off' price. For Reliance Spinning Mills, this translates to Rs 820.80 per share for common investors.

A minimum of 50 units is required to apply for an IPO during the book-building process. Global IME Capital has been managing the issue of the company.

After Sarbottam Cement Limited, this will be the 2nd company to issue an IPO under the book-building method in Nepal.

Reliance Spinning Mills Pvt. Ltd. was registered in the company registrar in the year 2051 B.S. With 4,300+ employees, Reliance Spinning Mills is the biggest of its kind in the country. The company manufactures Polyester, Viscous, and Acrylic yarn of international standard that is then exported worldwide, primarily to India and Turkey. The company has two manufacturing units located at Khanar, Sunsari, and Duhabi, Sunsari, Nepal. The total installed manufacturing capacity of the company is 40,680 MT per year as of mid-July 2021.