Sebon approves another gigantic FPO ; Nepal Bank to issue shares at Rs 280

Securities Board of Nepal has approved another gigantic FPO. This time it is the first bank of Nepal who will issue 1,76,84,857 units at Rs 280. The board has granted the company with an approval today.

Siddhartha Capital has already been appointed as the issue manager for the issue. 

The issuance of shares at premium price will shoot the bank's capital by Rs 1.76 arba. Similarly the reserve will rise by 3.18 arba. One among the main reason behind the FPO is the dilution of governments holding to 51%.

Nepal Bank is a bank rich in assets, however, the company has an accumulated loss. The collection of premium will turn the loss into profit. The bank is believed to start a new journey then, as the shareholders are assured for dividend. 

But at the time when the market is bearish and the stock price is near to the FPO price, the full subscription of FPO by general public can be doubtful.