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Shivam Cement’s IPO set to be a milestone

  • The cement factory will be the first of its type to issue public shares
- Post Report, Kathmandu

Jun 22, 2018-Shivam Cement Limited is set to issue 5,280,000 units of initial public offerings (IPOs) at  premium prices after the company received the green light from Securities Board of Nepal (Sebon). It is the first cement company that is issuing primary shares for general people.

Sebon Spokesperson Niraj Giri said the cement factory was the first of its type to issue the public shares.

“The company’s move could serve as a landmark for other similar companies to go public,” Giri said.

At present, Nepal’s stock market is largely dominated by banking and financial institutions.

Of the 208 companies listed on the Nepal Stock Exchange, only about 20 percent of the companies are from the real sector.

As per Sebon, many firms from real sectors are now attracted to the idea of issuing their shares to the public after the amendment of Securities Registration and Issue Regulation in 2016.

In addition, it has also paved the way for open pricing of IPOs.

Giri said the government’s announcement to provide various incentives to such firms has also attracted real sector companies to list their IPOs.

The government through the budget last year provisioned 15 per cent income tax rebate for firms that issue shares to public. The budget for 2018-19 also encourages real sector companies with capital of Rs1 billion or more to get listed on the stock exchange.

According to Sebon, Shivam Cement will be issuing 880,000 units of IPOs at the rate of Rs300 per unit for local people. It accounts to two percent of the company’s issued capital.

Similarly, the company has also received approval to issue 4,400,000 units of primary shares at Rs400 per unit for general people. The primary shares for the general people accounts for 10 percent of the company’s issued capital.

Shivam Cement has a production capacity of 3,000 tonnes of cement daily. The company has received credit rating grade of three plus from ICRA Nepal Limited.

Published: 22-06-2018 08:59

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