Sarbottam Cement Receives Approval From SEBON for IPO Release Through Book Building Method
Wed, Oct 18, 2023 11:07 AM on IPO/FPO News, Latest,
The Securities Exchange Board of Nepal (SEBON) has approved the IPO proposal of Sarbottam Cement Limited to issue shares through the book-building method. The company submitted its IPO proposal on the 28th of Ashadh, 2079, and received the green light after the hiatus of almost 15 months. Book building is the process by which an underwriter attempts to determine the price at which an initial public offering (IPO) will be offered. While 40% of the shares will be sold to Qualified Institutional Buyers (QIB), 60% will be issued to the general public.
The company has proposed to issue 60 lakh units out of which only 40% i.e. 24,00,000 shares will be issued to Qualified Institutional Investors remaining 60% i.e 36 lakh unit shares is reserved for the general public.
As per the preliminary bid submitted by QIB on 24th Asad, the minimum price stood at Rs. 501 per share. As per the provisions, Qualified institutional investors are required to study the intrinsic value of the assets acquired and determine the base value. By increasing the base value by 20% or decreasing it by 20%, they can establish the price range.
In line with this, Qualified institutional investors can apply for the IPO by offering a maximum of Rs. 601.20 and a minimum of Rs. 400.80. Once the IPO shares are issued, they will be sold at the price determined (the cut-off price), which may be above or below the base price, based on investor demand.
In cases where investors who bid above the base price but do not receive shares, there will be a three-day window to refund the excess amount with interest or make necessary account adjustments.
Ordinary investors will receive a 10% discount on the base price for IPO shares. After the shares are issued to the Qualified institutional investors, the company will proceed with the IPO for the general public.
Global IME Capital has been appointed as the issue manager.
Sarbottam Cement Limited was incorporated in October 2010 as a private limited company and converted into a public limited company in July 2019. The company is involved in the production and selling of clinker and cement. The company’s major shareholding is from the Saurabh Group, a prominent business house in Nepal. Its factory is located at Ramnagar VDC-05, Nawalparasi district. The company mainly manufactures OPC and PPC cement under the brand “Sarbottam”.
