Mega Bank's IPO oversubscribed

Mega Bank Nepal’s Initial Public Offering (IPO) has been oversubscribed by over 22 times the size of the offering.

"The IPO received applications for shares worth above Rs 14.22 billion from 125,000 applicants, according to preliminary reports," informed chief executive of the bank Anil Keshary Shah, calling the success of the IPO ‘a mega achievement’.

The bank had offered ordinary shares worth Rs 699 million at a face value of Rs 100 per unit for the public from June 2, which was open till today. An investor was allowed to apply for a minimum of 50 units and a maximum of 200,000 units. The shares will be allotted proportionately based on the total number of applications received.

The bank had received 75,000 applications and collected Rs 6.33 billion by the third day of the IPO. On the fourth and last day, it has received around Rs 8 billion from around 50,000 applicants.

"The success of the IPO is an indication that Mega Bank is in the right path in its belief of financial inclusion for economic upliftment," said Shah.

Mega Bank had appointed Citizens Investment Trust, Nabil Investment, NIBL Capital and NMB Capital as issue managers for the IPO. It will be the 30th commercial bank to be listed at Nepal Stock Exchange )Nepse) that is dominated by banks and financial institutions.

Mega Bank Nepal, which started operations on September 2010, has a paid up capital of Rs 1.63 billion, which will increase to Rs 2.33 billion after the shares are issued. The bank had earned Rs 130 million in the third quarter of the current fiscal year.

Three months back Commerz and Trust Bank Nepal’s IPO worth Rs 600 million was oversubscribed by 12 times the size.
Likewise, Civil Bank’s IPO worth Rs 800 million, held in December, was oversubscribed by almost seven times as investors had applied for shares worth Rs 5.4 billion.