KATHMANDU, Dec 10, 2012
In the biggest initial public offering (IPO) launched by the private sector till date, Civil Bank is floating its shares to the public for the first time from Monday to raise Rs 800 million. If the bank is successful in raising the said amount from the primary market, the paid-up capital of the category ´A´ financial institution will top Rs 2 billion.
“We are very optimistic about the IPO and hope it will be oversubscribed by at least three times,” Kishore Maharjan, CEO of the bank, told Republica on the sidelines of a press meet organized in Kathmandu on Sunday.
The bank is floating eight million units of shares with the face value of Rs 100 each. These shares are being issued by Citizens Investment Trust, Nabil Investment Limited, NCM Merchant Banking and Ace Capital Limited, which have been appointed issue managers for the IPO.
“Of the total number of shares that are up for grabs, five percent have been allotted to institutional investors and another five percent have been issued to staff,” Govinda Gurung, senior executive officer of the bank, told the press meet. “So we can say Rs 80 million has already been raised.”
Once the shares are successfully distributed, the promoters of the bank will hold 60 percent stake in the bank with the rest going to the public.
“We think investors who buy shares from the primary market will be able to earn good returns as the price of each share is expected to shoot up to a range of Rs 150 to Rs 200 soon as the stocks are listed on the stock market,” Civil Bank Chairman Iccha Raj Tamang told the press meet.
As per the rules of Securities Board of Nepal (Sebon), the bank´s shares will have to be put up for sale on the primary market for at least four days. If the shares are not fully subscribed, the bank can extend the IPO for up to 15 more days.
“We are hopeful the IPO will wrap up in first four days as there are not many investment avenues to cater to the pent-up demand,” CEO Maharjan said. “Besides, the bank´s financial health is also sound.”
The bank, which was established around two years ago, does not hold any bad debt and has a capital adequacy ratio -- a measure of capital reserves against assets at risk -- of 12.39 percent. “Once the shares floated to the public are subscribed, the bank´s capital adequacy ratio will hover at 15 percent, which will provide us with ample room to expand lending activities,” Gurung said.
The bank, which mobilized Rs 10.34 billion in deposits till the end of the first quarter of the current fiscal year, extended Rs 9.15 billion in loans by the end of the first quarter. It is planning to raise deposit base to Rs 23.61 billion and expand credit portfolio to Rs 19.65 billion by the end of the fiscal year 2014/15.
“By that time earning per share of the bank will rise to Rs 14.05 (from Rs 1.9 in the first quarter of the current fiscal year) and gross assets will rise to Rs 27.06 billion from Rs 11.96 billion of present,” Gurung said.
Source: Republica
In the biggest initial public offering (IPO) launched by the private sector till date, Civil Bank is floating its shares to the public for the first time from Monday to raise Rs 800 million. If the bank is successful in raising the said amount from the primary market, the paid-up capital of the category ´A´ financial institution will top Rs 2 billion.
“We are very optimistic about the IPO and hope it will be oversubscribed by at least three times,” Kishore Maharjan, CEO of the bank, told Republica on the sidelines of a press meet organized in Kathmandu on Sunday.
The bank is floating eight million units of shares with the face value of Rs 100 each. These shares are being issued by Citizens Investment Trust, Nabil Investment Limited, NCM Merchant Banking and Ace Capital Limited, which have been appointed issue managers for the IPO.
“Of the total number of shares that are up for grabs, five percent have been allotted to institutional investors and another five percent have been issued to staff,” Govinda Gurung, senior executive officer of the bank, told the press meet. “So we can say Rs 80 million has already been raised.”
Once the shares are successfully distributed, the promoters of the bank will hold 60 percent stake in the bank with the rest going to the public.
“We think investors who buy shares from the primary market will be able to earn good returns as the price of each share is expected to shoot up to a range of Rs 150 to Rs 200 soon as the stocks are listed on the stock market,” Civil Bank Chairman Iccha Raj Tamang told the press meet.
As per the rules of Securities Board of Nepal (Sebon), the bank´s shares will have to be put up for sale on the primary market for at least four days. If the shares are not fully subscribed, the bank can extend the IPO for up to 15 more days.
“We are hopeful the IPO will wrap up in first four days as there are not many investment avenues to cater to the pent-up demand,” CEO Maharjan said. “Besides, the bank´s financial health is also sound.”
The bank, which was established around two years ago, does not hold any bad debt and has a capital adequacy ratio -- a measure of capital reserves against assets at risk -- of 12.39 percent. “Once the shares floated to the public are subscribed, the bank´s capital adequacy ratio will hover at 15 percent, which will provide us with ample room to expand lending activities,” Gurung said.
The bank, which mobilized Rs 10.34 billion in deposits till the end of the first quarter of the current fiscal year, extended Rs 9.15 billion in loans by the end of the first quarter. It is planning to raise deposit base to Rs 23.61 billion and expand credit portfolio to Rs 19.65 billion by the end of the fiscal year 2014/15.
“By that time earning per share of the bank will rise to Rs 14.05 (from Rs 1.9 in the first quarter of the current fiscal year) and gross assets will rise to Rs 27.06 billion from Rs 11.96 billion of present,” Gurung said.
Source: Republica
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