SEBON approves 1.14 crore units FPO of NMB Bank @ Rs 333; Reserve to grow by massive Rs 2.65 arba

Securities Board of Nepal (SEBON) has provided final approval to NMB Bank Limited (NMB) to issue 1.14 crore units FPO at a premium price. The bank will now be issuing a total of 1,14,15,163 units further shares at a premium price of Rs 333 per share (a premium of Rs 233 per share in addition to par value of Rs 100 per share).

Citizen Investment Trust is the issue manager for the FPO.

NMB’s current paid-up capital remains at Rs 6.46 arba. After the capitalization of all FPO shares, its paid-up capital will increase to Rs 7.60 arba. Premium amount of Rs 233 per share will be added to the bank’s share premium account under Reserve fund, after which its reserve will grow by massive Rs 2.65 arba. However, the bank will still be short by Rs 40 crore (around 7%) to meet the paid-up capital requirement of Rs 8 arba. The premium thus collected can be capitalized by issuing bonus shares.

NMB Bank’s 21^st AGM held on Poush 24, 2073 had endorsed the agenda to issue FPO shares to maintain promoter-public shareholding structure at 51%:49% from existing 60.01%:39.99%. NMB had also issued further shares at Rs 250 per share to its joint-venture partner FMO (Netherlands) in 2073 after its jumbo merger with Pathibhara Bikas Bank, Bhrikuti Bikas Bank, Clean Energy Development Bank and Prudential Finance Company diluted FMO's ownership. Currently, FMO owns 20% of NMB, which will be further diluted to around 17% after this FPO.

NMB’s stock price has been on a downward spiral after it publicized the FPO price on May 28, and has lost 8.78% since. Its last traded price stands at Rs 405 as of yesterday (May 31, 2018).

NMB has posted net profit of Rs 1.47 arba till the end of third quarter of ongoing fiscal year 2074/75. It had distributed 19% bonus shares to its shareholders for FY2072/73 and is yet to conduct AGM for the last FY2073/74.