IPO of Miteri Development Bank on 16th Oct 2009

After long break, once again IPO season is hitting Nepali Share Market. On 16th Oct 2009, 1,35,450 units of ordinary shares of Miteri Development Bank will be released. Out of it, 2709 units will be secured for the banks employees. According to the announcement published in today’s Annapurna Post; the IPO will open on 16th Oct 2009, and will close on 22nd Oct 2009 at earliest. Each unit of share is rated at Rs. 100, where applicants can apply minimum 50 units and maximum 5,000 units.

Though ADB was supposed to release its IPO mid of August, but things didn’t seem to materialize as planned. Another IPO which is in the pipeline are City Homes (Real State Company), which might be the first real state and construction company to go online. Also by 2010 Jan, CSI bank will release its IPO.

Though the bank has mentioned its website (www.miteribank.com.np), its current website seems to be under construction. So, we couldn’t get much information regarding this bank. Anyway following are the information gathered from its announcement notice.
The promoters will be holding 70% of total shares, while 30% is planned to be released as an ordinary shares to make Rs. 4,51,44,000 as paid up capital.

The bank has head quarter at Dharan - 5, Sunari with two branches in Tarhara, Jhumka (Sunsari) and Urlabari (Morang). The president of the bank is Mr. Ajit Narayan Singh Thapa, while the CEO another promoter who holds maximum number of shares (24,000) among the promoters is Mr. Ram Bahadur Shrestha. While both of them are currently residing in Kathmandu, most of the other promoters of the bank are resident of Dharan, which is the bank’s major working area.

Looking the financials presented along the announcement notice, the bank made profits of Rs. 19,21,000 in FY 063/64 (Audited), Rs. 12,71,000 in FY 064/065 (Audited) and Rs. 33,05,000 in FY 065/066 (Un-audited). The EPS were Rs. 12, Rs. 4, Rs. 10 respectively in those fiscal years. The EPS was calculated based upon only promoter share units (i.e. 3,16,000 units). The bank has also painted pretty green picture by forecasting next few years Balance Sheet & Profit/Loss Account Statements with profit target of Rs. 1,32,11,000/year by FY 068/069 which would give EPS of Rs. 8.

IPO Announcement Notice (Courtesy Jamb)

Verdict: The bank seems pretty new, and even the promoters. Still, looking the profit made till date (AUDITED), the IPO is profitable deal. Atleast better than ADB. But don’t expect phenomenal listing price like other commercial banks like Citizen, BOAN, Global or even Sunrise. So, apply for it.