Sarvottam Paints Industries Limited is opening its IPO for general investors from Thursday, June 11, 2026 (Jeth 28, 2083 BS). If you are thinking about applying, here is a simple breakdown of the company’s financial health, its strengths, its risks, and what the credit rating actually tells you.
IPO Details at a Glance
The company is offering 7,05,500 units of shares to general investors, worth a total of Rs 7.05 crore (Rs 7,05,50,000). Each share is priced at Rs 100.
You can apply for a minimum of 10 units and a maximum of 5,000 units. The issue is officially open until Asar 11 (around June 25, 2026), but if it sees the kind of huge demand that recent IPOs have gotten on day one, it could close as early as Asar 2 (around June 16, 2026).
Global IME Capital Limited is the issue manager for this IPO. You can apply through any ASBA member bank or financial institution and their branches, or through the Mero Share Online app from home. Nepalis working abroad can also apply through Mero Share Online.
This 7,05,500-unit offering is actually the second and final part of the company’s full IPO. In total, Sarwottam Paints got approval to issue 8,50,000 units (worth Rs 8.5 crore), which is 25 percent of its issued capital of Rs 34 crore. Out of this, 85,000 units were already allotted to Nepalis working abroad, 42,500 units went to mutual funds, and 17,000 units went to employees back in Baishakh 2083. What remains now is this batch for the general public.
What Does the CareNP BB- Rating Mean?
CARE Ratings Nepal has given Sarvottam Paints a “CareNP BB-” issuer rating. In simple words, this rating shows that the company has a moderate level of risk when it comes to meeting its financial obligations on time. It is not the lowest rating a company can get, but it is also not among the safer ones either.
This rating assumes the company will keep its debt-to-equity ratio under 0.6 times by the end of fiscal year 2081/82. If the company’s debt grows faster than expected, the rating could come under pressure later.
A Quick Look at the Company
Sarvottam Paints makes paints for both interior and exterior walls, including emulsion, enamel, distemper, and wall putty. Its factory is located at Godavari-02 in Attariya, Kailali district, where it produces around 14.3 metric tons of paint every day.
The company started out as a private firm back in Magh 2071 BS (around January 2015) and converted into a public limited company on Asar 31, 2079 BS (around mid-July 2022). It has its own paint testing lab and says it puts a part of its yearly income into research and development to keep its paint quality consistent.
Right now, promoters hold 75 percent ownership of the company. Once this IPO is fully allotted, general shareholders will own the remaining 25 percent. The company says it plans to use the IPO money to expand its production capacity, increase exports, and reduce its dependence on imported paints, which would also help bring more foreign currency into the country.
The Good Side: Why the Company Looks Financially Stable
A few things are working in the company’s favour, according to the rating report.
Lower debt: The company’s debt-to-net-worth ratio dropped to 0.29 times in FY 2080/81, down from 0.52 times the year before. This happened mainly because customers paid off their dues near the end of the year, so the company did not need to use much of its bank working capital loan.
Better interest coverage: The company’s ability to pay interest on its loans improved to 2.01 times in FY 2080/81, compared to 1.59 times the previous year. A higher number here simply means the company earns enough to comfortably cover its loan interest.
Experienced leadership team: The board has four members. Chairman Shiva Singh Karki, age 53, has spent over a decade working in banking, finance, insurance, and investment, and he personally owns 23.74 percent of the company’s shares. Managing Director Nabin Prasad Bhatta has more than ten years of experience in the operations and administration side of the paint industry. Director Laxmi Dutta Pandey brings over two decades of experience in production and trade. Independent Director Kamalesh Pandey, who holds a BBS degree, runs his own hardware business.
The Concerns: What Investors Should Watch Out For
Now for the part that needs more attention before you apply.
A very long cash collection cycle: This is the biggest weak point. In FY 2080/81, it took the company an average of 458 days, almost 15 months, to collect payments from its dealers. On top of that, raw materials sit in storage for about 181 days before being used. Add these together, and the company’s full operating cycle stretches to 564 days. That is close to a year and a half before money actually comes back into the business, which forces the company to depend heavily on bank loans to keep running day to day.
Small and shrinking business size: A few years back, in FY 2077/78 and FY 2078/79, the company’s yearly revenue was above Rs 15 crore. But it fell to Rs 9.3 crore in FY 2079/80 and was Rs 9.5 crore in FY 2080/81. With such a small scale, it becomes difficult for Sarvottam to compete on price against bigger, well-established multinational paint brands.
Currency and raw material price risk: Paint manufacturing depends heavily on petrochemicals and pigments, most of which are linked to international prices and the US dollar exchange rate. When the dollar gets stronger, raw material costs go up, but the company cannot always raise its product prices by the same amount. Its profit margin (PAT margin) is currently only around 3 percent, so even small cost increases can eat into profits quickly.
Interest rate risk: Whenever banks and financial institutions face liquidity crunches and raise their lending rates, it directly affects how much profit the company is left with at the end of the year.
The Numbers: Past Performance and Future Projections
According to the company’s actual financial statements for FY 2081/82, Sarwottam Paints recorded an accumulated profit of more than Rs 2.59 crore. Its earnings per share (EPS) for that period was Rs 7.58, and its net worth per share stood at Rs 110.17.
For the current fiscal year (2082/83), the company expects its accumulated profit to cross Rs 4.18 crore. Looking further ahead, by FY 2084/85, it has projected an accumulated profit of more than Rs 14.90 crore, with EPS reaching around Rs 13.02 and net worth per share rising to Rs 143.84.
What Price Could the Share Get After Listing?
Once the IPO shares are allotted, Sarvottam Paints will get listed on the Nepal Stock Exchange (NEPSE), where regular trading will begin.
NEPSE sets the first-day trading price based on a company’s net worth per share. If the net worth per share is below Rs 100, the price is set based on that net worth figure. If it is above Rs 100, like Sarvottam’s Rs 110.17, the maximum first-day price can go up to three times the face value of Rs 100, which works out to Rs 300.
So on its first trading day, Sarvottam Paints’ share could be priced anywhere between Rs 100 and Rs 300 per unit. After that first day, the price will move purely based on demand and supply in the market, just like any other listed share.
Final Thoughts
Sarvottam Paints has shown some financial discipline by lowering its debt and improving its ability to cover interest payments, and its leadership team brings solid industry experience. At the same time, its very long cash collection cycle, small and shrinking revenue base, and exposure to currency and interest rate swings are real risks that any investor should weigh carefully.
Before applying for any IPO, it always helps to look beyond the excitement around primary market listings and check both the credit rating and the company’s underlying financial numbers, just like the ones discussed above.