The Securities Board of Nepal has approved the initial public offering (IPO) of the Sarbottam Cement.
After authorizing institutional investors to split shares, the board has granted permission for the issuance of 3.6 million shares, equivalent to NPR 29,920,000. The company has set the share issuance price at NPR 360 per share . Previously, the company had allotted share to institutional investors at the rate of 501 per share.
In the initial phase of the book-building method, eligible institutional investors were allowed to acquire shares through competitive bidding. However, subsequent to this phase, the regular share issuance process, as in the case of an IPO, will be followed.
The company has prioritized local investors for share issuance, followed by those employed abroad, and finally, the general public. Although an individual can apply for only 10 shares in other companies, in this case, applications for fewer than 50 shares will not be accepted. If one wishes to apply for 50 shares, they need to deposit NPR 18,450.
The book-building method is a price discovery mechanism used in the stock market. In this process, eligible institutional investors place bids for the shares of the company, indicating the number of shares they are willing to buy and the price they are willing to pay. The final issue price is then determined based on the bids received.
In summary, Sarbottam Cement has received approval for its IPO, and the book-building method has been employed to determine the final share issuance price, prioritizing local investors in the process.