Century’s IPO allotted at 7.9% to small group, 3.09% to big ones

ShareSansar, March 4:

The Initial Public Offering (IPO) worth Rs 92 crore issued by Century Commercial Bank Limited has been allotted today at the office of the commercial bank at Putalisadak in Kathmandu.

The IPO was allotted at 10:00 AM at 7.90percent to retail investors who had applied up to Rs 50,000 and at  just 3.09 percent to big investors.

This means that the smaller investors have benefitted more from the allotment as has been the policy of the regulator and the key stakeholders in the market.

The allotment model was designed in such way also because there were more applicants who applied for more than Rs 50,000.

For example, those who had applied for Rs 50,000 will get 40 units of the shares while those who applied for, say, Rs 51,000 will get just 16 units.

However, those who had applied for up to Rs 12,000 have fallen under lottery.

According to the issue manager, they are planning to distribute the allotment slips and refund the non-allottees will begin in five working days from the allotment (i.e. by March 9).

Century’s IPO was oversubscribed by 24.48 times.

The IPO, which was issued from January 9, had closed on January 13.

Century’s IPO was one of the most expected events in the stock market not just because of its sheer volume but also because it is the last IPO to be issued by any commercial bank of the country.

Nepal Rastra Bank has stopped issuing license to the commercial bank, and, on the contrary, has been directing the commercial banks and other BFIs to seek merger.
The offering was also special in that it was the largest IPO to be issued by any private bank in the country, second only to primary shares worth Rs 96 crore floated by Agriculture Development Bank Limited.

ICRA Nepal had assigned an ‘[ICRANP] IPO Grade 4+’ to Century Bank’s IPO, which is not at all bad by any standards.

Following the IPO, the commercial bank’s paid-up capital of Rs 1.08 billion will rise to Rs two billion, as per the regulatory requirement.

It may be noted that there was a huge response to the IPOs issued by three commercial banks — Civil Bank, Commerz and Trust Bank Nepal and Mega Bank—had issued their IPO over the last one year.

Civil Bank’s IPO was oversubscribed by seven times, Commerz and Trust’s IPO was oversubscribed by 11 times and Mega Bank’s IPO was oversubscribed by 22 times.