Primary shares oversubscribed

Citizens' Bank International's Initial Public Offerings (IPOs) is oversubscribed by over 15 times to around Rs 5 billion.
"The subscription crossed Rs 3 billion till yesterday," Pramod Pandeya, head-R&D at the Ace Development Bank, the issue manager of Citizens' IPOs, said adding that today evening the collection might touch around Rs 2 billion making it a total of around Rs 5 billion.
"Due to the secondary market's bad performance in recent months and two commercial bank's -- Citizens' International Bank and Bank of Asia Nepal (BoAN) -- IPOs at the same time worth equal units and amount, the primary issues, unlike earlier, would not be oversubscribed," said Sunil KC, deputy general manager of NMb Bank, the issue manager of Bank of Asia Nepal.
Citizens' International Bank floated three million-unit primary shares at a face value of Rs 100 each on February 3 that total Rs 300 million and BoAN on February 9. According to the rule, if the shares are oversubscribed, then the IPO should be closed on the fifth day. If not, the IPO remains open till a month. Citizens' IPO closed today and BoAN's IPO will close tomorrow due to oversubscription.
"The time is not favourable," said an investor who sold other shares he had for the new IPO as the financial institutions are considered more lucrative in the secondary market trading.
BoAN has also floated three million-unit primary shares at the face value of Rs 100 per unit that totals Rs 300 million on February 9. It is also expected to be oversubscribed and close tomorrow. The bank's primary shares also are expected to be oversubscribed by 15 times to around Rs 4.5 billion.
After the closure of the primary shares, the financial institution has to allot shares within 60 days. After allotment, within another 45 days according to the Securities Registration and Issue Approval Guideline 2057 the company must apply for listing at Nepse.
"If the company does not list its shares at Nepse within 45 days, it has to apply to Securities Board of Nepal (Sebon) with a proper explanation and seek a 30-day extension," states the guideline.


Classification revised
KATHMANDU: Nepse has -- like every year -- revised the list of Group-A companies. According to the new revision, of the 142 companies listed at Nepse, only 78 are in Group-A. Last year, there were 71 companies in the Group-A companies' list. According to the Securities Listing Regulation-2053, a company that has a minimum of Rs 20 million paid up capital, more than 1,000 shareholders, book value of the shares not less than paid up value, has submitted its accounts within the other six months of the end of fiscal year and is churning out profit for last three consecutive years is classified into a Group-A company. There are 14 commercial banks, a manufacturing company and hydropower company each, 10 insurance companies, 37 finance companies and 15 development banks in Group-A, according to the new revised list.