The meeting of the board of directors (BOD) of NIBL held on Tuesday decided to float further shares to the public, according to Bijendra Suwal, deputy general manager of NIBL.FPO is a process by which a company, which is already listed on an exchange, issues new shares to the investors or the existing shareholders.
The decision, however, is subject to the approval of the bank's upcoming annual general meeting.
Currently, the ratio of the promoter and public shares is 80:20. Bank and financial institutions (BFIs) are required to float at least 30 percent of their shares to the public.
According to the bank's annual report of fiscal year 2013/14, NIBL has 41.47 million units of ordinary shares of Rs 100 face value which equals to Rs 4.15 billion, before the bonus shares proposed that year is adjusted.
Twenty-one firms including Maha Laxmi Investment Pvt Ltd and Chhaya Investment Pvt Ltd, among other Group A promoters, have 50 percent holding, while Rastriya Beema Sansthan holds 15 percent promoter shares in NIBL. State-owned Rastriya Banijya Bank Ltd, which had stake of 15 percent, recently offloaded its shares from the bank through public auction.
The recent decision of Nepal Rastra Bank (NRB) to raise minimum paid-up capital by four times is also likely to prod other many BFIs to issue FPO to maintain such capital base.
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