Over half a million investors seeking shares in one of the youngest insurance company left empty-handed
KATHMANDU, Oct 16: The allotment of Initial Public Offering of Sanima General Insurance Ltd has been completed with 273,000 applicants receiving 10 unit shares each.
According to Sanima Insurance Ltd’s issue manager NIC Asia Capital Ltd, 2.73 million units of shares were allotted to 273,000 investors through a lottery. As the IPO was oversubscribed by 6.81 times for 2.73 million units shares allocated to the public, 590,945 applicants seeking primary shares of the non-life insurance company were left empty-handed.
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Sanima General Insurance Company is one of the youngest insurance companies that commenced its operations from July 2018.
As allotment related regulations require the company to allot at least 10 unit shares to each investor, the primary shares are distributed through a lottery system when they get oversubscribed.
The insurance company had floated its IPO with an aim to collect Rs 300 million. Out of 30 percent, or three million unit primary shares, it had allocated 2.73 million units to the general public while the remaining 170,000 units of shares were reserved for mutual funds and non-life insurer’s own staff.
According to the issue manager, the IPO had drawn a total of 866,905 investors applying for 18.59 million units of shares. Out of the total applications, 3,360 applicants seeking 863,545 shares were invalid.
IPOs, particularly of financial institutions and insurance companies, have been drawing huge responses in recent years.
Earlier last month, the IPO of another insurance company, General Insurance Company Ltd, worth Rs 300 million was also oversubscribed by nearly seven times. Nearly half a million investors were left empty-handed as primary shares were allotted through lottery.
