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Wednesday, May 27, 2009

Nagarik Lagani Kosh (CIT) says Prime Bank’s IPO crosses Rs 7bn

Prime Commercial Bank has received applications worth over Rs 7 billion for its primary issue that closed today.

“Our collection exceeded our expectations of Rs 4 million and crossed Rs 7 billion,” said Narayan Das Manandhar, chief executive officer of Prime Commercial Bank.

“We thought that the collection would be less because the general investors have not yet got their money back from Sunrise Bank’s primary issue though the money has returned to the banking channels,” Manandhar said adding that the financial institutions also could not lend sufficiently as their closing was nearing.

The bank floated 30,00,000-units of shares worth Rs 300 million on Sunday. According to the new regulation of Securities Board of Nepal (Sebon), the primary issue can be closed after the fourth day if the collection exceeds the target.

On the first day, Sunday, some 28,328 applications worth Rs 704.239 were received and on the second day 35,994 applications worth Rs 1.05 billion rolled in, making it a total of 1.75 billion in the first two days but by the end of third day, the collection shot up to over Rs 4 billion. “On the last day today, we expect the collection to cross Rs 7 billion,” Manandhar, the CEO of the 21st commercial bank said. “The bank has 60 collection centres at Ranjana Cinema hall alone in New Road and has managed the collection well,” Manandhar added.

Prime Commercial Bank — established on September 24, 2007 — was one of the last commercial banks to float primary issue.

Citizen Investment Trust (CIT) was the issue manager for Prime Commercial Bank. Agriculture Development Bank Ltd (ADBL) is the now the last of 26 commercial banks that is planning to float its primary issue. It has appointed Ace Development Bank as its issue manager for the largest ever IPO of Rs 960 million — more than three commercial banks put together.

Earlier, the primary issue of Sunrise Bank was oversubscribed by around 30 times to over Rs 10 billion. Similarly, the primary issue of Bank of Asia Nepal was oversubscribed by below 19 per cent to Rs 5.40 billion whereas Citizens’ Bank International’s primary issue was oversubscribed by a little above 20 times to Rs 6 billion. Due to no other investment opportunity, investment in financial institutions’ shares has become a newfound interest of late.

Meanwhile, Sebon has approved the much-awaited Chilime Hydropower Company’s primary issue of 23,04,000 units. The board permitted Chilime to add a premium of Rs 223.70 to the face value of Rs 100 per unit, making it a total of Rs 323.70 per unit share equal to its networth.

Source: THT

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