KATHMANDU, MAY 4, 2012
The primary market seems to have bounced back as Janata Bank Nepal’s public issue — the largest public offering from any private bank in the last two years — got oversubscribed within four days.
“Initial reports showed applications for shares worth Rs 700 million have already been collected at the collection centres but the final amount could be over Rs 1 billion,” informed chief executive of Civil Capital — one of three issue managers of the issue — Bhisma Raj Chalise.
The 27th commercial bank’s six million units of primary issue worth Rs 600 million at face value of Rs 100 per unit opened to the public on April 29. The issue is managed by three merchant bankers, Citizen Investment Trust, NMB Capital and Civil Capital.
The awful performance of the stock market had shadowed the prospects of primary issues in recent times. The difficulty in getting the issues subscribed even made the issuers postpone their Initial Public Offerings (IPOs). “We had conducted an initial study to gauge public reaction before the IPO was announced and found investors were willing to purchase shares belonging to commercial banks at par value,” he informed, adding, “That was why we were hopeful the issue would be subscribed within the given four days.”
The recent issue of Manjushree Financial Institution and Bagmati Development Bank took about one month to be fully subscribed. In August, 2011, Bhargav Bikas Bank’s IPO worth Rs 4 million did not get subscribed compelling its underwriter NMB Capital to purchase the shares.
However, lucky for Janata Bank its IPO was preceded by an overwhelming surge in the stock market, so much so, that even new investors flocked to buy the issue. Janata’s IPO was even blamed for the current backlash at the stock exchange that pushed the index down by about nine per cent as compared to last week’s closing.
The charm of this IPO comes after a long interval between the last public offering by a commercial bank and now. The last public offering by a commercial bank was in April 2010 of Agriculture Development Bank.
TDB’s IPO soon
Tourism Development Bank (TDB) has got approval from Securities Board of Nepal to float an Initial Public Offering (IPO) worth Rs 240 million. TDB will issue 2.4 million unit shares at face value of Rs 100. After the public issue, its capital will be Rs 640 million from the current Rs 400 million. The bank has appointed NCM Merchant Banking and Citizen Investment Trust as issue managers. The bank that had earned Rs 39 million operating profit by the third quarter has Rs 119.14 as networth per share.
The primary market seems to have bounced back as Janata Bank Nepal’s public issue — the largest public offering from any private bank in the last two years — got oversubscribed within four days.
“Initial reports showed applications for shares worth Rs 700 million have already been collected at the collection centres but the final amount could be over Rs 1 billion,” informed chief executive of Civil Capital — one of three issue managers of the issue — Bhisma Raj Chalise.
The 27th commercial bank’s six million units of primary issue worth Rs 600 million at face value of Rs 100 per unit opened to the public on April 29. The issue is managed by three merchant bankers, Citizen Investment Trust, NMB Capital and Civil Capital.
The awful performance of the stock market had shadowed the prospects of primary issues in recent times. The difficulty in getting the issues subscribed even made the issuers postpone their Initial Public Offerings (IPOs). “We had conducted an initial study to gauge public reaction before the IPO was announced and found investors were willing to purchase shares belonging to commercial banks at par value,” he informed, adding, “That was why we were hopeful the issue would be subscribed within the given four days.”
The recent issue of Manjushree Financial Institution and Bagmati Development Bank took about one month to be fully subscribed. In August, 2011, Bhargav Bikas Bank’s IPO worth Rs 4 million did not get subscribed compelling its underwriter NMB Capital to purchase the shares.
However, lucky for Janata Bank its IPO was preceded by an overwhelming surge in the stock market, so much so, that even new investors flocked to buy the issue. Janata’s IPO was even blamed for the current backlash at the stock exchange that pushed the index down by about nine per cent as compared to last week’s closing.
The charm of this IPO comes after a long interval between the last public offering by a commercial bank and now. The last public offering by a commercial bank was in April 2010 of Agriculture Development Bank.
TDB’s IPO soon
Tourism Development Bank (TDB) has got approval from Securities Board of Nepal to float an Initial Public Offering (IPO) worth Rs 240 million. TDB will issue 2.4 million unit shares at face value of Rs 100. After the public issue, its capital will be Rs 640 million from the current Rs 400 million. The bank has appointed NCM Merchant Banking and Citizen Investment Trust as issue managers. The bank that had earned Rs 39 million operating profit by the third quarter has Rs 119.14 as networth per share.
Source: THT
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