Shivam Cement is slated to make an initial public offering (IPO) of 880,000 shares priced at Rs300 apiece (Rs100 face value plus Rs200 premium) for locals of Makwanpur district on July 29.

The company plans to issue another 4,400,000 shares to the general public at Rs400 per unit. ICRA Nepal has assigned a Grade 3 rating to the IPO of Shivam Cement. The company has appointed Siddhartha Capital as issue manager.

According to the Securities Board of Nepal (Sebon), Shivam Cement is the first manufacturing company from the private sector to issue shares to the public in the last decade.

The country’s only stock exchange is dominated by banks and financial institutions who account for 80 percent of the listed shares.

In a bid to attract real sector companies to go public, Sebon revised its stocks registration and issuance regulations last year.

As per the new rules, companies are required to offer only 10 percent of their shares to the general public, down from 30 percent previously.  Moreover, the budget statement for fiscal 2016-17 said that companies wishing to go public would get a 15 percent income tax rebate.

Likewise, the budget statement for 2018-19 states that manufacturing companies with a paid-up capital of Rs1 billion or more will have to go public.

Sebon approved the IPO of Shivam Cement last month. Although about 50 companies are reported to have

registered as public limited companies at the Office of the Company Registrar recently, only a few have made enquiries about issuing shares to the public, said the regulator.

“It is a positive development that real sector companies are issuing shares to the public,” stock analyst Neerab Pudasaini said.

According to him, the IPO of the cement company offers a good opportunity for portfolio diversification for investors as the secondary market is dominated by the banking sector. Promoted by the Sharda Group, Shivam Cement owns 30 percent of Hongshi-Shivam Cement, a Nepal-China joint venture company.

Pudasaini said investors may not snap up Shivam Cement IPO shares with the stock market in the doldrums. “As the market is in a bearish mood, investors doubt they will get good returns from the company in the short run,” he said.