Nerude Laghubitta Bikas Bank Limited - IPO

Nerude Laghubitta Bikas Bank Limited going to release 60,000 units of Shares to general investor including 2,400 units to its employees at the face value of Rs 100 per share as per announcement letter published in newspaper. Nerude Laghubitta Bikas Bank Limited is issuing its IPO from 1st January 2010 to 5th January. The minimum number of shares to be applied is 10 and maximum in 1000 units. NIDC Capital Market Ltd. has been appointed as the Issue Manager for this IPO.
Nerude Laghubitta Bikas Bank Limited is licensed as “D” Class Financial Institution by NRB with registered central office at Biratnagar, Morang which is its major area of operation. The announcement notice claims to open branches and extension counters as required, after accomplish the criteria of NRB.

Capital Structure and Ownership Composition after Allotment:
Authorized Capital: Rs.2,00,00,000
Promoter Shares: Rs. 1,40,00,000 (70%)
Public Shares: Rs.60,00,000 (30%)
IPO Date:
Opening Date: 1st January 2010 (2066 Poush 17)
Closing Date: 5th  January 2010 (2066 Poush 21) (Sooner) , 15th  January 2010 (2066 Magh 1) (Later)

As per the promoters are concerned, out of 20 promoters, 2 promoters has experience in banking sector. On the management side, it’s strange to see President Dr. Bheshprasad Dhamala, who does not have experience in banking sector. Other members in the management team, Mr. Surendra Raj Bhattarai, Sudhir Kumar Shrestha and Mani Kumar Aryal has experience in financial institution. And remain member are from other business sector and affiliated with non banking organization.

Financial Performance:

Though the Bank is 'D' categorized financial institution from the central bank, the financial recital of this bank is sound and healthy. If we analyze the financial performance of fiscal year 2065/66 the bank has strong result in terms of return. From Rs. 14 million paid up capital the bank was able to made Rs. 9.699 million. It meant the Earning per share was Rs. 69.28 (Rs. 69.28 return from investment of Rs. 100) which can be termed as superb return.
Not only EPS, the bank had a sound gross income, interest from income and had superb operating profit of Rs. 16.579 million. During the fiscal year 2065/66 the bank holds Rs. 18.653 million in its reserve and surplus account and had Rs. 233.24 net worth per share. The previous financial indicator reveals the bank is in strong position and its forecast financial return looks as if the bank will snatch its expected result. The in-depth picture of the financial report can be traded from below:

Financial performance and expected financials of Nerude.

IPO Strategy:

There is no risk at investing in public offering of any company (until and unless unexpected bad things happens) as the investment amount will be returned in minimum of 46 days and maximum of 76 days after the issue close. Investing in Nerude is a wonderful opportunity for every investor as the financial return is superior and satisfactory. The performance of Nerude in Nepal stock exchange will be better as there will be less units of shares and demand might exceed the supply (Demand>supply=High Price). However, the opportunity of allotment in investors favor tends to low as only 60000 units is issued in public and the overwhelm to apply for IPO in Nepali market is enthusiastic (proven by previous IPO issues and amount collected).
At conclusion, rush for the IPO and invest as much as you can. Short term investor will be benefited after the allotment on market price and long terms investors expected to cheers loud till the holding of shares as return will be healthy year on year.

Source: Jambnews Service