Sarbottam Cement IPO Approved By Sebon, Company To Issue 36 Lakh Units Soon To General Public

The Securities Exchange Board of Nepal (SEBON) has finally approved the IPO issue proposal of Sarbottam Cement Limited on Poush 3, 2080. This is the first company to issue an IPO under a book building system in Nepal.

The company has got the permission to issue 36,00,000 unit shares to the general public at a bid price of NPR 360.9 each. This is 7.74% of the company's issued capital i.e. Rs 4.65 arba. The IPO issue will raise a total of Rs. 1.29 Arba for the company. 

Earlier, as per the guidelines, the cement company had issued its primary shares through the book-building process to the Qualified Institutional Investors (QII) from 6th - 10th Mangsir, 2080. The allotment of which happened on 11th Mangsir. A total of 41 eligible institutional investors had applied for 36,19,190 unit shares against 24 Lakh units initially offered to them. 

In total Sarbottam Cement to issue 12.9033% of it's issued capital of Rs 4.65 Arba, i.e. a total of 60 lakh shares equal to 60 crore. Out of which 40% i.e. 24 lakh shares were already issued and allotted to the Qualified Institutional Investors (QIIs), while the remaining 60% i.e. 36 lakh shares are to be issued later to the general public. 

In general the 'cut-off price' serves as a pivotal factor in th IPO issued under the book-building process. During the primary shares allotment to the qualified institutional investors, the 'cutoff price' for Sarbottam Cement was set at Rs 401. Following the guidelines, shares are made available to the general public at a reduced rate, specifically 10% lower than the 'cut-off' price. For Sarbottam Cement, this translates to Rs 360.90 per share for common investors.

A minimum of 50 units is required to apply for an IPO at the book building process. An aspiring investors are expected to allocate at least Rs 18,045 to participate in this offering.

Global IME Capital has been managing the issue of the company.

ICRA Nepal has reaffirmed the issuer rating of [ICRANP-IR] BBB+ (pronounced ICRA NP issuer rating triple B plus) to Sarbottam Cement Limited. ICRA Nepal has also reaffirmed the long-term rating of [ICRANP] LBBB+ (pronounced ICRA NP L triple B plus) and the short-term rating of [ICRANP] A2 (pronounced ICRA NP A two) to Sarbottam’s bank loan limits.