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CTBN primary shares oversubscribed

Commerz and Trust Bank Nepal (CTBN)’s Initial Public Offering (IPO) closed today after receiving an overwhelming response.

“According to preliminary reports, we can assess that primary shares have been subscribed by seven to 10 times,” said chief executive of Civil Capital — one of the four issue managers of the IPO — Bhishma Raj Chalise.

The bank had opened its public offering for ordinary shares worth Rs 600 million at a face value of Rs 100 per unit on February 17. The bank is expected to raise more than Rs four billion.

“Collection centres were crowded even during the general strike,” said Chalise, adding that this time more applications had been filed for less than 500 units.

CTBN will be the 29th commercial bank to be listed at Nepal Stock Exchange (Nepse). It had appointed Citizens Investment Trust, Nabil Investment Limited, Growmore Merchant Banker and Civil Capital Limited as issue managers for the IPO.

The last day of CTBN’s IPO also coincided with Civil Bank’s listing at Nepse. Today, the 28th commercial bank at Nepse, Civil Bank’s eight million units of ordinary shares were listed and will be traded from next Thursday. The bank’s shares will debut between Rs 100 and Rs 310 as per regulation.

Civil’s IPO was also subscribed by almost seven times as investors had applied for shares worth Rs 5.4 billion. Janata Bank’s IPO held in April was also subscribed by three times.

“Since bank shares yield good returns and their chances of going bad is also low, public offerings of commercial banks are well received by investors but shares of smaller development banks and finance companies hardly get fully subscribed,” said Chalise.

Two more commercial banks — Mega Bank and Century Commercial Bank — will also be issuing shares to the public before the end of the current fiscal year.

source: The Himalayan Times, 21 Feb 2013



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