Jyoti Bikas Bank primary issue oversubscribed

Primary shares of Jyoti Bikas Bank Ltd (JBBL) that has been oversubscribed by over six times to above Rs 1.78 billion closed yesterday evening.

"Some 121,000 applications came for the 2.92 million-unit of Jyoti Bikas Bank's Initial Public Offerings (IPOs)," according to the issue manager Ace Development Bank.

Jyoti Bikas Bank had floated 2.92 million-unit of ordinary shares to public at the face value of Rs 100 per unit on August 16. The development bank that has Rs 740 million of authorised capital will add Rs 740 million. The IPO is worth Rs 292 million. "The promoters have already paid their share of Rs 448 million," according to the bank.

Currently, 40 development banks' 88.49 million shares worth Rs 8.84 billion are listed at Nepse. Besides, 24 commercial banks, 62 finance companies and 19 insurance companiesare also listed on the stock exchange.

Development Banks' group is one of the key market propellers in the secondary market that is dominated by the financial institutions including commercial banks, development banks and finance companies apart from insurance companies. Their trading constitutes above 85 per cent of Nepse's overall business.

Nepse lists 95 firms under Class-A category

Five development banks, two insurance companies, 10 finance companies, two hotels, National Hydropower Company and Nepal Telecom (NT) -- a total of 21 listed companies -- made it to the prestigious Class-A category in this fiscal year, according to the Nepal Stock Exchange (Nespe).
"The Nepse has listed 95 companies under Class-A category, out of the total 149-listed companies at the sole secondary market," said the sole secondary market here today.
A company that has atleast Rs 20 million paid up capital, minimum of 1,000 common share holders, operating in profit since last three years, must have floated shares to public under the by-laws 9, book value per share must not be less than its paid up value and has been submitting its financial statement within six months from the closure of the fiscal year is qualified to be listed under the Class-A category, according to the Nepse.
The number of companies listed under Group-A category has been continuously increasing since 1996-97, when there were only seven companies under the category.
"In the year 2009-10, Nepse also delisted three companies from under the Class-A category apart from adding 21 to it," the Nepse said adding that two companies merged to get entry into the prestigious category. "United Insurance, Bhajuratna Finance and Everest Finance are delisted from under the Class-A category as they didnot abide by the regulation," it added. However, Nepse listed five development banks, two insurance companies, 10 finance companies, two hotels, one hydropower company and Nepal Telecom (NT) under the Class-A companies in this fiscal year," said secondary market that has been witnessing a sluggish performance in the last three months.
Nepal Stock Exchange, according to the international norms, classifies the listed companies under the Class-A category according to their performances.
According to the Nepse, 15 commercial banks are under the Class-A category, whereas only one company each -- Unilever Nepal Ltd and Nepal Telecom -- from the manufacturing group and Others group are under the Class-A, two each from hydropower companies group and hotels group, 11 from insurance companies group, 43 finance companies, 20 development banks fall under the Class-A category.

Narayani Finance and National Finance merged

A joint annual general meeting (AGM) of National Finance Ltd and Narayani Finance Ltd (Bittiya Sanstha) here today decided to merge the two and name the new institution 'Narayani National Finance Company'.
"After the merger of the two financial institutions, the name of the merged company will be Narayani National Finance Company," said Ram Krishna Manandhar, coordinator of the merger committee and chairman of National Finance.
The joint AGM was held here to merge the two finance companies into one after permission from the Nepal Rastra Bank (NRB), the central authority. Last March, NRB had given the go-ahead for the merger. The two companies had also signed a memorandum of understanding (MoU) after NRB's green signal.
This is the first time in the financial history of Nepal that two different financial institutes of different classes have merged, said Manandhar adding that the merged company plans to get upgraded to a Class B development bank soon. "We plan to upgrade the financial institution to A-Class commercial bank in the long run," he said.
The joint AGM also decided to issue 1:0.5 rights shares to increase the paid up capital for upgrading the institution to a Class-B development bank.
The total paid up capital after the merger is Rs 440 million while the total deposit is registered at Rs 1.56 billion. Loans and credit portfolio stand at Rs 1.53 billion, as of at the end of the third quarter of the current fiscal year. The total net profit is at Rs 40 million, said Manandhar.