Kathmandu, January 29
NEPSE traders and investors are required to have a minimum investment of Rs 41,040 to participate in the Reliance Spinning IPO. The Reliance Spinning IPO is facilitated through the book-building method, with the offering price set at Rs 820.80 per share for the general public.
According to the Nepal Stock Exchange, the cut-off price for the Reliance Spinning IPO has been set at Rs 912, as determined by institutional investors covering all shares at this rate.
In compliance with the book-building method, there is a provision to offer shares to the general public at a reduced cut-off price, which, in this case, is 10 per cent lower. Therefore, the adjusted share price for the public stands at Rs 820.80 per share.
In line with this arrangement, individual investors are required to apply for a minimum of 50 shares, which will cost Rs 41,040.
Before the general public can apply for the IPO, it is initiating an IPO specifically for locals affected by the project and Nepalis currently employed abroad. Subsequently, the application process will be extended to the general public in the third stage.
This marks the second instance in Nepal where an IPO is being issued through the book-building method, with Best Cement adopting this approach before.
Reliance Spinning is set to issue 10.14 per cent of its total issued capital, amounting to Rs 1.9 billion, which equals 1,926,266 shares. Following the allocation of shares to institutions, the remaining 1,155,960 shares will be made available for issuance to the affected locals, individuals employed abroad, and the general public.
Reliance Spinning’s yarn factory is operational in Itahari. The company states that it sells its yarn to various textile industries across the country along with exporting it to other countries, including India.
As of the end of July, the company’s net worth per share was Rs 248.67. Additionally, the prospectus indicates an income per share of Rs 54.34 and an accumulated profit of Rs 5.63 billion. The projected normal investment payback period is 6.88 years.
