Siddhartha Capital refunding money to Kumari Bank right share auction non-allottees today; direct transfer to bank accounts

Siddhartha Capital Limited, the issue manager for the auction of 3.66 lakh units unclaimed right shares of Kumari Bank Limited (KBL), is refunding money to the non-allottees today (Jestha 29, 2074). As per the notice published today, the non-allottees to get their money transferred directly to their bank accounts today. Lately, investors have complained about the delay in refunding money when shares are not allotted to them. Companies have been known to delay refunds for as long as 12 days after bid opening day (for example: recent auctions of Agricultural Development Bank and Neco Insurance). Merchant bankers provide the details of received bids to the BOD of the company, which only issue refunds after 7 days of the allotment. Since the company does not provide interest on the money applied for auctions, the money only generates interest for the company/issue manager. The money remains in the bank account of the company/issue manager anywhere from 7 - 22 days during the auction.“Come Shrawan, the IPO allotment will take no more than 20 days and even today, refunds from IPO are issued within  5 days of allotment—so why does it take more than 7 days to refund the auction money?”, said an investor who was not allotted the shares in this auction of Kumari Bank. In this context, the bidders are being refunded their money after 8 days of the bid opening day. “Since the cutoff price is decided on the bid opening day, allotment of shares and refunds should not take more than 2-3 days”, stressed the investor. Kumari Bank Limited (KBL) had auctioned its unclaimed 2,80,470 units ordinary shares and 86,092.66 units of promoter right shares to the general public from Jestha 14, 2074 till Jestha 21, 2074. The cutoff price for ordinary shares of KBL was Rs 307 and that for promoter shares was Rs 107. KBL has earned net profit of Rs 37.59 crore in the third quarter of the fiscal year 2073/74 as per its unaudited report. KBL is in the final process of acquiring four BFIs: Mahakali Bikas Bank, Kasthamandap Development Bank, Paschimanchal Finance and Kankrebihar Bikas Bank.