Coming soon: ADBL shares worth Rs 960m

Agricultural Development Bank Limited (ADBL) will start issuing ordinary shares worth Rs. 960 million within the next two weeks as the Securities Board of Nepal (SEBON) is expected to grant its approval by Thursday.
It will be the largest ever initial public offering (IPO) in the country. The existing rule regarding issuance of securities has provisioned that a company should make its IPO within two months after receiving permission. Ace Development Bank is its issue manager. Ace chief executive officer Siddhant Raj Pandey said that he also got information about SEBON giving permission to ADBL to issue shares.
"We will inform the public about the procedure of share issuance within a week," he said. Issuance of ADBL public shares was delayed due to various procedural and legal complications. "Lately, we were delayed in giving permission as ADBL just submitted the unaudited financial report," said a SEBON source. "Now, we have got the audited report."
Earlier, the IPO was stalled as there was no merchant banker company able to underwrite ADBL's huge share issue. The underwriter should underwrite 50 percent of the shares. It means the underwriter should purchase undersubscribed shares. Nepal Rastra Bank later simplified the provision regarding underwriting by allowing Ace to underwrite the ADBL's shares. The ADBL is set to issue 30 percent of the total number of shares. The government's stake in the ADBL will remain at 55.86 percent after issuance of the shares. About two years ago, ADBL had issued 14.14 percent of the shares to its customers. SEBON had stopped listing of these shares on the stock exchange as they were not issued through the IPO process.
When the stock market has been heading downhill, ADBL is making the largest ever share issue. A stock analyst said that all the shares may not be sold due to the liquidity crisis in the banking system. But he said it may help bring excess liquidity in the market to the banking system. "The share subscription of City Development Bank was 27 times higher recently," Pandey said.