Friday, June 26, 2009

Public Dev. Bank IPO starting from 28th June- Collection Centers as ...

Public Development Bank will be releasing 6,00,000 ordinary shares amounting Rs. 60 million. NIDC Capital Market Ltd. have been appointed as issue manager for the public issue of Rs. 60 million i.e. 600000 shares. Following are the collection centers listed for getting/depositing IPO forms.

1 N.I.D.C Cpital Markets Ltd. Kamal Pokhari, Kathmandu
2 Public Development Bank Ltd. Birgunj, Banepa, Hetauda, Dharan, Biratnagar
3 Bishawa Bikash Bank Ltd. Chiple Dhunga, Pokhara
4 Corporate Development Bank Birgunj
5 Kamana Bikash Bank Ltd. Kaski, Lekhnath marg, Pokhara
6 Kasthamandap Development Bank Ltd. New road, Chabhil, Satdobato
7 Malika Development Bank Ltd. Dhangadhi
8 Sahayogi Bikash Bank Ltd. Janakpur
9 Tinahu Bikash Bank Ltd. Butwal
10 Unique Financial Institution Ltd. Putali Sadak Kathmandu
11 Sagarmatha Marchant Banking & Finance Ltd. Manbhawan, Kathmandu
12 Kabeli Bikash Bank Ltd. Dhangadhi
13 Goodwill Finance Ltd. Ithari
14 Western Development Bank Ltd. Dang
15 Bageshwari Development Bank Ltd. Nepalgunj
16 Kankai Bikash Bank Ltd. Damak, Jhapa
17 Nepal Express Finance Sundhara, Kathmandu
18 Siddhartha Development Bank Ltd. Butwal
19 Valley Finance Ltd. Maharajgunj


IPO of Arun Valley Oversubsribed by 40 times

Well, Arun Hydropower IPO got blazing response from the day one. After cancellation of Chilime IPO, the entire amount poured into Arun Valley IPO. According to the reports the IPO got oversubscribed on first day itself, on 23rd June 2009. “Yes, the report is true”. According to NMB, there was somewhat 7,000 application forms collected which amounted Rs 160 million. The company had floated 5,15,000-unit primary shares adding a premium of Rs 84 to the face value of Rs 100, making it Rs 184 per unit share.

The final official numbers are yet to come by end of the day, but looking the rush and given the released quantity of shares, this IPO might be the one which will be highly oversubscribed like Sunrise Bank IPO. One of the official from the collection center have clearly hinted the oversubscription might be somewhere around 35-40 times.

There are some reports claiming some funny incidents in some of the collection centers from the valley. Numerous applicants had applied to IPO thinking it was in fact Chilime Hydropower not even reading the fine printed form. Just bolstering the fact, Nepal still has herd natured investors, the investors thronged to the collection centers with bundles of cash thinking Arun Valley was in fact Chilime.

Much surprisingly, there was still huge group of people who didn’t even know what was Arun Valley, the company & what it did?
Some thought it was Bank, some development bank and one intelligent guy claimed it to be Construction Company who builds colonies & apartments.

It is true that people are much more aware than before regarding share & stock investment, but the fact is there still exists people with very less knowledge of how to apply for shares or what they should look into. People blindly follow the myth - No share can go below IPO Price. While we have living example of NTC (Nepal Doorsachar), NHPC (National Hydropower) whose current price is below than its initial IPO price. Be it investor’s ignorance or their carelessness, but such kind of naive players helps market to be driven by some cunning mafia’s. And at the end of the day, when they lose everything, these people give Secondary Market bad name by calling it - Casino.

Anyway, let’s not get off track from the main topic and Wish all applicants of Arun Valley Good Luck for their application. Believe me, we all applicant very much need it even to get allotted even 20% shares.

Source: nepseguide

NRB Penalized Siddhartha Bank Ltd. 17 Thousand

Nepal Rasta Bank (NRB) has penalized Siddhartha bank ltd (SBL) Rs. 17000 for not maintaining cash reserve ratio (CRR). NRB has punished SBL thrice for the same reason during this current fiscal year 2065/2066. On Wednesday, the central bank has decided to penalized SBL third time for not maintaining the CRR during Magh 26 to Falgun 3 (8 Feb 2009 to 14 Feb 2009).

The bank has paid Rs. 46947 as the first fine, Rs. 41230 for second time during this current fiscal year. Before SBL, Bank of Kathmandu, Prime Commercial bank, NIC bank had also paid fine to NRB for short CRR. On Tuesday (23 June, 2009) NRB had Penalized Nabil bank Rs. 75 Thousand for the same cause.

According to the monetary policy, banking and financial institutions should compulsorily maintain CRR 5.5 percent of total deposits. If the bank fails to maintain CRR for the first time, NRB fines according to the inter-bank rate. At present, inter-bank rate is 6.5 percent.

If any bank falls short to maintain CRR, the fine will be levied in three phases. In case the financial institutions fail to maintain CRR for the first time, they will be charged on inter-bank rate (6.5%) and this rate doubles if the same practice is carried out for the second time. Moreover, the penalty charge for the third time will be thrice the inter-bank rate (19.5%).

According to BASEL-II, 20% liquidity should be maintained by the commercial banks. It is thought that this liquidity limit has also created complexity to maintain CRR. Earlier, bankers association has appealed NRB to decrease CRR ratio by 1 percent citing the liquidity problem in the market. If CRR is decreased by 1%, Rs. 4 billion liquidity will be accessible in the market.

NRB has also penalized banks who failed to provide the loan to rural people. Lumbini bank Ltd. has to pay fine Rs.21612 to NRB for the same reason, said NRB source. The bank has fined due to the low investment in rural sector during the first quarter of the current fiscal year. There is the provision to invest 3 percent in remote areas of total loan investment made by banks. Previously, NRB has penalized Nepal Bangladesh Bank Rs. 1850178 for the same cause.

Jamb news source

Arun Valley IPO' on good response & oversubsribed.

Arun Valley Hydropower Company received good response to its primary issue. On the first day, 7,000 applications worth Rs 160 million were files its Initial Public Offering (IPO). It has floated 5,15,000-unit primary shares from 23 June, 2009. It has added a premium of Rs 84 to the face value of Rs 100, making it Rs 184 per unit share.

According to the new Securities Board of Nepal (SEBON) regulation, a company can add premium equal to its net worth, if it is in profit and has distributed cash dividend for three consecutive years. Arun Valley has done so. It distributed 20 per cent cash dividend from the profits of last fiscal year.

Arun Valley Hydropower that constructed Piluwakhola Hydropower in Chainpur of Sankhuwasabha district has been providing 20 per cent cash dividend from the profit over three successive fiscal years. Interested applicants can apply for a minimum of 50-unit shares of Arun Valley while a minimum 20-unit can be applied for of Chilime Hydropower. The maximum number of units one can apply for of Arun Valley is 50,000 while for Chilime it is 1,000 only.

NMB Bank is the sales and issue manager for Arun Valley's primary issue while the issue and sales managers of Chilime's primary issue are NIDC Capital Market and Citizen Investment Trust (CIT).

The company was established in 1997 and promoted by Guru Prasad Neupane, Jeevan Raj Shakya and Amar Raj Tamrakar to develop, build, own and operate hydropower projects, formed joint ventures with companies to build medium and large hydropower projects and develop entrepreneurship for the promotion of the hydropower sector's currently-owned Piluwakhola Hydropower Project (3MW).

The promoters own 12,00,000-unit shares and the remaining 17,15,000-unit shares will be floated for the public. Arun Valley is planning Upper Piluwa Khola Small Hydropower Project (4.5MW), Lower Phemekhola Small Hydropower Project (2.2MW) and Kabeli-B1 Small Hydropower Project (9.8MW). The new investment partner of the hydropower company will be Janata Bank that is promoted by Guru Prasad Neupane and is in the process of getting the licence of a commercial bank.

However, Chilime Hydropower has suspended its much awaited IPO after a court order. It had planned to float its 23,04,000-unit shares from June 15 adding a premium of Rs 223.70 to the face value of Rs 100 per unit, making it a total of Rs 323.70 per unit share.

But the locals of Rasuwa, where the hydropower project is located, have locked the project demanding shares and the company has agreed to give them eight per cent shares. Under the new regulation, SEBON permitted Chilime to give five per cent shares only to the locals and they moved court saying it was against the earlier agreement with Chilime. Yesterday,(24 June, 2009) the Court fixed another hearing on Chilime on June 29.

Chilime's IPO doldrums Posts ahead

IPO of Chilime Hydropower Company was withheld one day before the issue date, by Supreme Court till 2066 Ashad 10 (24-June-2009) after the general people from the affected areas of Chilime Hyropower Company had filed case against the issue of Chilime, indicating the company did not allot shares equals to 8 percent as per the earlier agreement.

Yesterday (24 June, 2009), yet again the Supreme Court has posted the hearing of CHCL for coming Monday (29 June, 2009) and ordered to stop public offering until the next notice. The Central court has called the representatives of Prime Minister Office and Water Resource ministry for the next hearing. It had not called them in yesterday's hearing.

The court has asked them to be present in the next hearing as the case was filed making them as an opposition. Yesterday, Chilime hydropower Company, SEBON, Nepal Electricity Authority and lawyers had a discussion regarding the IPO issue of Chilime.

Wednesday, June 24, 2009

Collection Centers for IPO of Arun Valley Hydro Power Ltd.

S.N Collecting Centers Address
1 NMB Bank Ltd Babarmahal, Tindobato, Banepa, Kavre, Chipleydhunga, Pokhara, Milanchowk, Butwal, Mahendrapath Dharan-5, Lubhu, Lalitpur and Rangeli Road - Biratnagar
2 Swastik Merchant Finance Co. Ltd. Khichpokhari, Ktm
3 Navdurga Finance Co. Ltd.
4 Elite Capital Ltd., Jamal, Kathmandu
5 Shree Investment & Finance Co. Ltd., Dillbazar & Branch Office, Biratnagar
6 Pathvara Bikas Bank Ltd. Urlabari, Morong
7 Goodwill Finance Ltd. Itahari
8 Malika Bikas Bank Ltd. Dhangadi & branch office Mahendra Nagar & Tikapur
9 Sewa Bikas Bank Ltd., Butwal
10 Public Dev. Bank Ltd. Birgunj
11 Corporate Dev. Bank. Ltd. Birgunj
12 I.C.F.C Bittiya Sanstha Ltd., Bhatbateni, Kathmandu
13 Pokhara Finance Ltd. Pokhara
14 Clean Energy Dev. Bank Ltd., Sitapaila, Kathmandu
15 Alipic Everest Finance Ltd., Kathmandu Mall, Sundhara
16 Bageshwori Dev. Bank Ltd. Nepalgunj

Tuesday, June 23, 2009

Another NRB rap on NDB's knuckles

Nepal Rastra Bank (NRB) has asked the troubled Nepal Development Bank (NDB) to clarify its Board of Directors' stand on the clarification letter that it submitted to NRB on Thursday. The NDB submitted its explanation signed by its chairman Amar Gurung to NRB but NRB said it had sought clarification on why the ailing development bank should not be liquidated from its board, said a high ranking NRB official. The NRB letter has asked NDB's board to clarify its stand.

"If the clarification is from the board also, the minutes of the board meeting also have to be submitted along with the clarification," the official said adding that the minutes of the board meeting are a must if it is the board's decision. "It is unclear whether it is the NDB chairman's personal explanation or the reply of the board of directors."

"Yes, we have received a query letter," NDB acting chief executive officer Purna Prasad Sharma said adding that the board is meeting to draft a clarification to NRB after it received the letter. On June 18, NDB submitted a complete capital plan but also sought time till October 17 to improve its financial health. It claimed that given the opportunity, it could sell shares of various institutions and get back the deposit from National Cooperatives as instructed by NRB. However, it still needs an additional Rs 70 million capital injections even after it manages to get its money back. However, there isn't any guarantee that NDB will make amends as it has repeatedly been flouting the central bank's directives.

Individual depositors will get their money back since the financial institution has Rs 16.5 million in cash and Rs 160.3 million bank deposit. The NRB's findings show the Employee Provident Fund (Rs 331.4 million) and the Nepal Army (Rs 180 million) might not get their money back but small depositors need not worry. NDB has around 20,000 shareholders and 3,500 depositors.

If NRB finds the clarification unsatisfactory, it will file a case at Patan Appellate Court to press for NDB's liquidation. NRB has already seized all its assets and frozen the accounts in various financial institutions. NDB, the nation's first development bank started operations in 1998. Though it has a paid-up capital of Rs 320 million, it ran into huge losses, pegged at Rs 690.2 million till the end of mid-March. Its non-performing assets are at 55.09 per cent and capital adequacy ratio (CAR) stands at a whopping 48.31 per cent. As per rule, a bank must maintain its CAR at 11 per cent.