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SEBON Approves Reliance Spinning Mills IPO

The Securities Exchange Board of Nepal (SEBON) has approved the IPO proposal of Reliance Spinning Mills Limited. The company will issue 1,155,960 unit shares to the general public at a bid price of NPR 820.80 each through the book-building method.

Previously, Reliance Spinning Mills issued primary shares to Qualified Institutional Investors (QII) from 10th Magh to 14th Magh, 2080. The allotment occurred on 15th Magh.

Reliance Spinning Mills will issue a total of 10.14% of its Rs 1.90 Arba issued capital, amounting to 19,26,600 shares. Of these, 40%, or 7,70,640 shares, were already allotted to QIIs, while the remaining 60%, or 11,55,960 shares, will be offered to the general public.

In the book-building process, the ‘cut-off price’ is crucial. For the primary shares allotted to QIIs, the ‘cut-off price’ was Rs 912. Following guidelines, the shares are available to the general public at 10% lower than the ‘cut-off’ price, which is Rs 820.80 per share.

Applicants must apply for a minimum of 50 units during the IPO. Global IME Capital is managing the issue.

This will be the second company, after Sarbottam Cement Limited, to issue an IPO under the book-building method in Nepal.

ICRA Nepal has reaffirmed Sarbottam Cement Limited’s issuer rating at [ICRANP-IR] BBB+. It also reaffirmed the long-term rating at [ICRANP] LBBB+ and the short-term rating at [ICRANP] A2 for Sarbottam’s bank loan limits.

Reliance Spinning Mills Pvt. Ltd., registered in 2051 B.S., employs over 4,300 people and is the largest of its kind in Nepal. The company manufactures international standard Polyester, Viscous, and Acrylic yarn, mainly exporting to India and Turkey. It has two manufacturing units in Khanar, Sunsari, and Duhabi, Sunsari, with a total capacity of 40,680 MT per year as of mid-July 2021.


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