NEPSE’s Entry Ticket to Reliance IPO is Rs 41,040!

In a significant development on the Nepal Stock Exchange (NEPSE), investors and traders eyeing participation in the upcoming Reliance Spinning IPO must hold an entry ticket of Rs 41,040. The highly anticipated IPO, employing the book-building method, reveals an offering price of Rs 820.80 per share for the general public.

According to the NEPSE, institutional investors have determined the cut-off price for the Reliance Spinning IPO at Rs 912. However, in accordance with the book-building method, there’s a provision for the general public to acquire shares at a discounted cut-off price, set at 10% lower. Hence, the adjusted share price for individual investors stands at Rs 820.80 per share.

To participate, individual investors are required to apply for a minimum of 50 shares, translating to an investment of Rs 41,040.

The IPO process unfolds in three stages, commencing with a specific offering for locals affected by the project and Nepalis employed abroad. Subsequently, the application process will extend to the general public.

This marks the second instance in Nepal where an IPO is introduced through the book-building method, with Best Cement having previously adopted this approach.

Reliance Spinning is slated to issue 10.14% of its total issued capital, amounting to Rs 1.9 billion, or 1,926,266 shares. Following allocation to institutions, 1,155,960 shares will be made available for affected locals, individuals employed abroad, and the general public.

Operating a yarn factory in Itahari, Reliance Spinning emphasizes sales to various textile industries across Nepal and exports to countries such as India.

As of the end of July, the company reports a net worth per share of Rs 248.67, an income per share of Rs 54.34, and an accumulated profit of Rs 5.63 billion. The projected normal investment payback period is 6.88 years.