Three Years Since Samaj Laghubitta Issued IPO, Why Is It Still Not Traded on NEPSE?

Three years have passed since Samaj Laghubitta Bittiya Sanstha Limited (SAMAJ) issued its initial public offering, but the company is still not traded on the Nepal Stock Exchange. (NEPSE).

On 31 August 2020, the IPO allotment of Samaj Laghubitta Bittiya Sanstha had been concluded at the premises of Siddhartha Capital Limited. Samaj Laghubitta had issued 86,000 units worth Rs 86 lakh as Initial Public Offering to the general public.

As per the allotment module, a total of 8,070 applicants were allotted 10 units each via lottery, and the remaining 5.39 lakh applicants were returned empty hands. Likewise, a total of 1,000 units were allotted to the staff of the company and 4,300 units were allotted to mutual funds.

All 8,070 of the lucky applicants who were allotted shares at that time are still unable to trade them today on the secondary market. 2,00,000 units of IPO shares of Samaj Laghubitta Bittiya Sanstha Limited (SAMAJ) are already listed on NEPSE.

Previously, Samaj Laghubitta (SAMAJ) and Swastik Laghubitta (SWSLBSL) signed a merger agreement; however, the agreement between the two companies was terminated before the shares could be opened for trading in the secondary market.

Samaj Laghubitta's CEO, Mr. Kishori Mahato, had said three years prior that the shares would be traded following the company’s coordination with Nepal Rastra Bank to obtain a "de-merge" letter. Now, three years later, Samaj Laghubitta is still unable to obtain the "de-merge" document, demonstrating the company's fundamental incapacity to meet the shareholders' fundamental right to information. The least the company could do was publish a notice explaining why the shares cannot be traded, even if the company cannot be traded for a variety of reasons.

In a discussion with a NEPSE spokesperson earlier today, Mr. Murari Parajuli said that the exchange will permit the trading of shares only after the microfinance company files the merger termination letter from the central bank. To get more information about the matter, we also attempted to contact Samaj Laghubitta Bittiya Sanstha Limited, but they were unavailable.