When should and could IPO allot?

Primary market has become a prime destination for the investors to load their heavy bucks in. Initial public offerings are taken as hot cakes these days and everyone, from a layman to an astute investor wants to take a piece of it. However, investment in this market freezes money for long so investors want the allotment to be done very soon. Moreover people hate to wait long as they want to rejoice the allotment in their favor.

At times general people assume that the allotment is taking bit long time and start repenting on their investment decision or blame the concerned issue managers for the delay. Hence it is necessary for everyone to comprehend the prevailing rules of Securities Board of Nepal to estimate an approximate time of IPO (Initial Public Offering) allotment.

IPO issuance flooded the market almost two months back starting with Prime Bank, then came Vibore Bikash Bank, Crystal finance, Arun Valley hydropower and Public development bank in row. All of these are yet to undergo allotment.

Securities Board of Nepal (SEBON) has stated a separate rule for allotment based on the number of share applications which is effective after the closing date of primary issue.

A table below gives an idea of the IPO allotment time:

No. of Share application for IPO	Maximum days of allotment
Up to 100,000	40 days
100,001 to 200,000	50 days
200,001 to 300,000	60 days
300,001 and above	70 days

As per SEBON rule, the issue manager and issuance company should return the amounts to non allotted investors and allotted share slip with remaining money to allotted investors within 5 days of allotment. Therefore, the allotment of all the IPOs has to be completed by the month of August.

The table below gives an idea of possible allotment date based on the number of applications the specific company received.

Company	Issue manager	Issue Close	* No. of Application	Max Allotment Time	* Possible Allotment Date	Last Allotment Date
Prime Commercial Bank Ltd.	CIT	27th May `09	300000 plus	70 days	2nd Aug `09	5th Aug `09
Vibore Bikash Bank Ltd.	NMB	14th Jun `09	107000	50 days	31st Jul `09	3rd Aug `09
Crystal Finance Ltd.	NMB	19th Jun `09	52000	40 days	26th Jul `09	29th Jul `09
Arun Valley Hydropower Ltd.	NMB	26th Jun `09	111000	50 days	10th Aug `09	15th Aug `09
Public Dev. Bank Ltd.	NIDC	1st Jul `09	105000	50 days	18th Aug `09	20th Aug `09

* All the above information is collected from the authorized source.

Source: Pratistha Bhurtel & Bikash Chaudhary