Kathmandu, December 5 — The long-delayed Initial Public Offering (IPO) of Reliance Spinning Mills Limited is set to move forward, and investors interested in applying will need to deposit Rs. 41,040 per minimum application. The Nepal Securities Board (SEBON) recently instructed the issue and sales manager, Global IME Capital, to proceed with the IPO process.
IPO Details
- The company will issue shares to the public through the book-building method at a price of Rs. 820.80 per share, which is 10% lower than the cut-off price of Rs. 912 per share set for qualified institutional investors (QIIs).
- Each retail investor must apply for a minimum of 50 shares.
- The company plans to issue 11,55,960 shares to the general public.
Institutional Investor Round
- Earlier, the company allocated shares to QIIs.
- Qualified institutional investors submitted 64 applications for 7,70,640 shares at the floor price of Rs. 608 and the ceiling price of Rs. 912.
- Bidders included Gaurav Nepal Investment, Kumari Capital, Nabil Stock Dealer, Prabhu Capital, and several other institutions.
Company Capital and Allocation
- Reliance Spinning Mills has a paid-up capital of Rs. 1.90 Arba, and the IPO represents 10.145% of the capital, totaling Rs. 19.26 crore or 19,26,600 shares.
- In the first phase, 40% of shares (7,70,640) were allocated to QIIs between 10–14 Magh 2080 B.S.
- The IPO for the general public had been approved on 12 Asar 2081 B.S., but the process was halted due to complaints and later court proceedings.
Reason for Delay
The IPO was delayed due to a dispute over outstanding electricity payments between Reliance and the Nepal Electricity Authority. Reliance had recorded Rs. 75.37 crore as a loss settlement and submitted Rs. 2.75 crore as a security deposit to proceed with legal clearance.
How Book-Building Works
- The company collects indicative bids from qualified institutional investors, including desired number of shares and proposed price range.
- The cut-off price is determined based on these bids. QIIs buy shares at the cut-off price, and the general public pays 10% less than this price.
- The allocation to QIIs is reported to SEBON within 7 days.
- After SEBON approval, the IPO is opened for the general public with a full disclosure of all details.
Reliance Spinning Mills IPO Summary
| Detail | Information |
|---|---|
| IPO Method | Book-Building |
| Retail Price | Rs. 820.80 per share |
| Cut-Off Price (QIIs) | Rs. 912 per share |
| Minimum Application | 50 shares |
| Total Shares for Public | 11,55,960 shares |
| Institutional Allocation | 7,70,640 shares |
| Paid-Up Capital | Rs. 1.90 Arba |
| IPO Percentage of Capital | 10.145% |
| Issue Manager | Global IME Capital |
| Security Deposit Paid | Rs. 2.75 crore |