FMDB floats IPO worth Rs. 18m

Kathmandu, Oct. 4: First Microfinance Development Bank (FMDB) Limited has floated an Initial Public Offering (IPO) worth Rs. 18 million from Wednesday.

The company has issued 180,000 unit shares, of which 9,000 units have been allocated for mutual funds and 3,600 units are dedicated to the employees of the company.

According to the company, investors can apply for the IPO till October 9. The issue period will be extended up to November 2 if all the shares are not sold out.

“Investors can apply for a minimum 50 units to a maximum 900 unit shares. Forms can be obtained from and submitted to all the banks and financial institutions that have ASBA (Application Supported by Blocked Account) system,” said the issue manager company, NMB Capital.

The IPO trend of microfinance companies shows that the shares will be oversubscribed. Therefore, the IPO will be distributed through a lottery system as the capital market regulator, the Security Board of Nepal (SEBON), has implemented a provision to allocate at least 10 units to every individual who applies for the shares in the IPO and FPO (Further Public Offering).

Likewise, only individuals can apply for the IPO of any company. If the share is short-subscribed by individuals, only then companies will have a chance to apply for such shares.

After the conclusion of the IPO, the paid up capital of the company will reach Rs. 58 million from Rs. 40 million.

It earned Rs. 4.8 million in net profit last fiscal year 2016/17.

The bank had started its operation in January 2010