FPO:
The FPO issuance of NMB Bank has started from today. The bank is issuing 1,14,15,163 unit shares at a price of Rs 333. The bank has endorsed the public offering to meet its capital requirement of Rs 8 arba. After issuing the Further Public Offering, the share capital of the bank will stand at Rs 7.60 arba. To fulfill the minimum capital requirements of Rs 8 arba, NMB will need to issue only about 6% bonus shares. Along with the fulfillment of capital requirement, the company’s share structure will be converted to 51:49. The current capital structure of the bank is around 60:40.
Just like in previous FPOs, this issue has also gathered much interest from the investors. But in the recent period, the investors have started to become wary as the issue price is very close to the current market price. The recent FPO issuance of Butwal Power Company and Pokhara Finance can be considered as examples.
The main issue creating dilemma among the investors on whether to apply for the FPO is its price of Rs 333, as the current trading price of the stock is Rs 368. There is not much room for capital gain should the market continue its recent downward trend. The calculation of the FPO price based on the SEBON’s guidelines was determined to be Rs 535. The bank had also proposed the FPO at Rs 422 earlier, but after certain market survey, it lowered the price to Rs 333.
