IPO of 9 companies in the pipeline

Published On: December 13, 2016 08:36 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 13: Nine companies have sought approval of the Securities Board of Nepal (Sebon) to launch initial public offering (IPO) worth Rs 461.79 million. 

Similarly, two companies are awaiting the stock market regulator's nod to launch their follow on public offering (FPO).

According to Sebon, five hydropower companies and four microfinance institutions are floating 4.62 million units of primary shares to raise Rs 461.79 million from the market. 

Akhukhola Jalbidhut Company Ltd, Mailung Khola Jal Vidhyut Company Ltd, Garjang Upatyaka Hydro Power Ltd and Radhi Bidyut Company Ltd are offering primary shares only to people in the project affected areas. However, general public can subscribe primary shares of Samata Microfinance Bittiya Sanstha, Forward Community Micro Finance Bittiya Sanstha, Mahuli Samudayik Laghubitta Bittiya Sanstha, Swadeshi Laghubitta Bittiya Sanstha and United Modi Hydropower Ltd.

Similarly, Mahakali Bikas Bank Ltd and Nepal Life Insurance Company Ltd have also applied for the approval of Sebon to float their FPOs. They plan to float 236,368 units and 3.12 million units of shares, respectively.

IPO is getting overwhelming response from investors as public offerings have been oversubscribed by multiple times in recent years.

Sebon had permitted 17 companies to float 8.59 billion units of shares through IPO and FPO in Fiscal Year 2015/16. 

Similarly, 11 companies have applied at Sebon to launch their rights issue. According to Sebon, these companies, which are from finance, hydropower, development bank and insurance groups, are issue 45.41 million units of shares to raise Rs 4.54 billion. Neco Insurance Company Ltd alone plans to float 3.2 million of rights shares.
Nepse continues downward slide
Nepal Stock Exchange (Nepse) index fell by 13.37 points on Monday to close at 1,509.43 points. 

The benchmark index has been losing value after hitting an all time high of 1881.45 points on July 27. 

As bank and financial institutions (BFIs) are tightening margin lending in the wake of liquidity crunch, the stock market is feeling the pinch. While investors are finding it difficult to get easy financing from BFIs, even those investors, who used to make investment in stocks from their savings, are now parking their money in fixed deposits yielding 8 to 9 percent interest income, according to analysts. 

The crunch of fund is also reflected in the daily turnover of the stock market. Daily turnover fell to Rs 548.32 million on Monday, down from average daily turnover of Rs 1 billion few weeks ago.

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