Reliance Spinning Mills’ IPO has not been listed on NEPSE due to regulatory scrutiny. Following a letter from the Commission for the Investigation of Abuse of Authority (CIAA), NEPSE officials decided that proceeding with the listing amid oversight concerns would be risky. According to high-level sources at NEPSE, the IPO had been issued at an unusually high premium through irregular practices, prompting complaints from the general public. Officials also faced uncertainty regarding the appropriate opening price for the public issue.
The company had received approval from the Securities Board of Nepal (SEBON) to issue 19,260,600 shares, representing 10.14% of its paid-up capital of NPR 190 million. Of these, 40% (7,706,640 shares) were allocated for qualified institutional investors, while the remaining 60% (11,553,960 shares) were intended for the general public.
The IPO for institutional investors was conducted via the book-building method from Magh 10–14, 2080 B.S., where 18 institutional investors bid up to a maximum of NPR 912 per share. Based on this, the cut-off price was set at NPR 912. For general public investors, a 10% discount on the cut-off price was applied, resulting in a final IPO price of NPR 820.80 per share.
Earlier, in Asar 2081 B.S., the Federal Parliament’s Public Accounts Committee had questioned Reliance Spinning Mills regarding its financial statements and IPO process. Subsequently, SEBON instructed Global IME Capital Limited, the issue manager, to suspend the IPO for Nepalis working abroad, originally scheduled to begin on Asar 27, 2081 B.S. Later, on Mangsir 16, SEBON, following the High Court Patan’s order, approved the continuation of the public portion of the IPO issuance.
Of the shares allocated for the public, 115,596 were reserved for Nepalis working abroad, 57,798 for collective investment funds, and 57,798 for company employees. The remaining 924,768 shares were made available to the general public. The allotment process for the IPO was completed on Poush 18. Reliance Spinning Mills is only the second company in Nepal to issue an IPO via the book-building method.
Established in 2054 B.S., Reliance Spinning Mills is one of Nepal’s largest spinning companies. It produces cotton, polyester, viscose, acrylic, and blended yarns, primarily exporting to India and Turkey. The company has received an A-minus rating from Care Ratings Nepal, indicating a strong ability to meet its financial obligations.
The company operates two production centers in Khanar and Duhabi in Sunsari district and employs over 4,300 workers. Its annual production capacity is 50,163 metric tons.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
