Yeti Brewery Plans IPO Issuance Through Book Building, Highlights Agenda for 2nd AGM on Magh 25

Yeti Brewery Limited has announced its 2nd Annual General Meeting (AGM) scheduled for Magh 25, 2080. The meeting is set to take place at the company's head office in Lazimpat, Kathmandu.

A key highlight of the AGM agenda is the proposal to endorse a substantial 200% dividend for the fiscal year 2079/80, comprising 100% bonus shares and 100% cash dividend.

Furthermore, the AGM will deliberate on restructuring the shareholding composition within the promoter and public shareholding groups. The proposed adjustment aims to maintain 85% ownership within the promoter shareholding group and allocate 15% to the public shareholding group.

In a significant move, the AGM will also address the Book Building process for the company's upcoming Initial Public Offering (IPO) and maintain the Par Value of the company at Rs 50. The AGM will grant full authority to the board of directors, enabling them to take necessary actions for the issuance of IPO shares through the book-building method.

Yeti Brewery P. Ltd. is a joint venture of Vishal Group and another Group of Nepal. The company was incorporated in the Year 2013 and commercial production started in 2017. Yeti Brewery's current annual capacity for beer manufacturing is 360,000 Hectoliters. Yeti Brewery has created employment for over 1,200 people directly and indirectly.

Highlights of Yeti Brewery:

- Currently holds over 15% market share of Nepal Beer Consumption.
- Yeti Brewery’s indigenous brand ARNA is the 3rd largest brand in Nepal in a short span of 3 Years.
- Yeti Brewery has a licensing agreement with United Breweries Ltd. (India) for the manufacturing, sales, and distribution of the Kingfisher (KF) brand in Nepal. United Breweries is India’s largest brewer with over 50% market share.
- First and only brewery in Nepal to be ISO:22000 & HACCP Certified – the highest standard in Food Safety Management. This was achieved in 1st year itself.
- Silver and Bronze Medal winners respectively for its brand ARNA 8 and ARNA LIGHT at the London Beer Competition 2021 – only Nepalese Beers to be awarded such accolades.

AGM Notice

What exactly is the book-building system?

Book building allows a company to issue an IPO at a premium (higher) price for each share instead of the present practice of issuing at Rs. 100 per share.

Book Building System is the process of price discovery in which a company hires a merchant bank to decide a price range at which shares are to be issued instead of a specific price. The merchant bank is known as an underwriter or a book runner. The bank is responsible to research the issuing company and come up with a price range for its IPO shares. Once the price range is decided, the merchant bank then prepares a prospectus calling out investors to apply for the shares.

Book Building System of price discovery mechanism dominates the IPO and FPO issuance worldwide. Among several other IPO issuance mechanisms such as fixed price, tender, auction, and public offer method, Book Building System is considered to be the most efficient method. Several developed countries have adopted the Book Building System. This method helps to raise a large amount of capital, gain price-relevant information from potential buyers, bring in higher net revenue, provide riskier projects and access to the stock market, and liquidity to investors.

Besides, the mechanism also broadens the functions of institutional investors as it broadens the scope of services before and after IPO issuance. Besides this, the mechanism encourages local and international companies to float IPOs as it involves a fair process. GoN's one-year-old policy to introduce more manufacturing companies in the stock market has been a failure as most of the manufacturing and tech companies are hesitant to enter the stock market. So, the book-building process might be a helping hand to attain this goal as companies will no longer be forced to issue shares at par value.