Sarbottam Cement's Public Issue Oversubscribed by 19.32 Times, Garnering Nearly Rs. 20 Arba from a Staggering 10 Lakh Applicants

Wed, Feb 28, 2024 9:55 PM on IPO/FPO News, Latest,

Sarbottam Cement Limited successfully conducted its Initial Public Offering (IPO), issuing 27,76,076 units of shares to the general public through a meticulous book-building process spanning from the 13th to the 16th of Falgun.

In a preceding issuance phase, the company allocated 2,67,000 units to Nepalese citizens working abroad and 9,30,000 units to industry-affected locals in Nawalparasi and mine excavation-affected locals in Palpa. However, only 2,48,470 units were allotted to valid applicants, leading to the inclusion of the remaining 4,87,910 unsubscribed shares into the general public pool, resulting in a total of 30,84,530 units available for subscription. Among these, 1,54,227 units each were earmarked for mutual funds and company employees, with the remaining 27,76,076 units offered to the general public.

Sarbottam Cement issued 12.9033% of its capital, amounting to Rs 4.65 Arba, equivalent to 60 lakh shares valued at 60 crores. Of these, 40% (24 lakh shares) were allocated to Qualified Institutional Investors (QIIs), and the remaining 60% (36 lakh shares) were designated for the general public, including industry-affected locals, foreign migrants, mutual funds, company employees, and the wider public audience.

Global IME Capital, serving as the issue manager, oversaw the IPO application process, where interested investors could subscribe for a minimum of 50 units and a maximum of 10,000 units. The share price for common investors was set at Rs. 360.90 per share, determined through the rigorous book-building method.

As per the latest update, the CDSC reported an overwhelming response, with 10,12,384 applicants vying for a total of 53,633,990 units, valued at Rs. 19.35 Arba. The remarkable oversubscription rate of 19.32 times implies that, on average, one in every 20 applicants will successfully receive 50 units.

Despite requiring a significant minimum investment of Rs. 18,045 per applicant due to a minimum subscription of 50 units at a share price of Rs. 360.90, Sarbottam Cement Limited's Initial Public Offering (IPO) witnessed remarkable oversubscription. This substantial investment amount, which surpasses that of many other company IPOs, underscores the strong investor interest in Sarbottam Cement's shares.

ICRA Nepal has reaffirmed the issuer rating of [ICRANP-IR] BBB+ (pronounced ICRA NP issuer rating triple B plus) to Sarbottam Cement Limited. ICRA Nepal has also reaffirmed the long-term rating of [ICRANP] LBBB+ (pronounced ICRA NP L triple B plus) and the short-term rating of [ICRANP] A2 (pronounced ICRA NP A two) to Sarbottam’s bank loan limits.