Reliance Spinning Mills Limited is launching an Initial Public Offering (IPO) for Foreign Nepalese Employees starting today, from 22nd Mangsir to 25th Mangsir, 2082, with the possibility of extending until Poush 07 if the subscription falls short.
Previously, according to the regulations, the company conducted its initial share issuance using the book-building approach directed at Qualified Institutional Investors (QIIs) from 10th Magh to 14th Magh, 2080, with allotment occurring on 15th Magh.
Overall, Reliance Spinning Mills plans to issue 10.14% of its total capital of Rs 1.90 Arba, equating to 19,26,600 shares. Of these, 40% or 7,70,640 shares have already been assigned to Qualified Institutional Investors (QII), leaving 60% or 11,55,960 shares to be allocated later to the public.
From the 11,55,960 shares available in this public offering, 10% or 1,15,596 shares will be allocated specifically for Nepalese nationals employed overseas. The remaining 10,40,364 shares will subsequently be available to the general public.
Global IME Capital has been appointed as the issue manager. Participants can apply for a minimum of 50 shares, with a cap of 20,000 shares.
The company’s stock price stands at Rs. 820.80 per share for regular investors. The IPO is being released via the book-building technique.
Typically, the ‘cut-off price’ is crucial in IPOs conducted through the book-building process. During the initial share allocation to the qualified institutional investors, the ‘cut-off price’ for Reliance Spinning Mills was established at Rs 912. As per the regulations, shares are offered to the general public at a rate 10% less than the ‘cut-off’ price, which for Reliance Spinning Mills translates to Rs 820.80 per share for regular investors.
Following Sarbottam Cement Limited, this will mark the second company to issue an IPO under the book-building methodology in Nepal.
CARE Ratings Nepal Limited (CRNL) has kept Reliance Spinning Mills Limited (RSML) on credit watch with evolving implications. The company’s issuer rating of CARE-NP A- (Is), reflecting adequate safety and minimal credit risk, remains unchanged. Likewise, CRNL has sustained the same credit watch status for RSML’s long-term rating (CARE-NP A-) and short-term rating (CARE-NP A2+) concerning its banking facilities.
Reliance Spinning Mills Pvt. Ltd. was established in the company registrar in the year 2051 B.S. With over 4,300 employees, Reliance Spinning Mills is the largest in its category across the country. The company produces Polyester, Viscose, and Acrylic yarn adhering to international standards, which is then exported globally, primarily to India and Turkey. The business operates two manufacturing plants located in Khanar, Sunsari, and Duhabi, Sunsari, Nepal. As of mid-July 2021, the company has a total installed manufacturing capacity of 40,680 MT annually.
