Sarbottam Cement issues IPOs in Nepali first

Sarbottam Cement has become the first Nepali company to float its initial public offerings (IPOs) at the book building price. According to myRepublica, the cement producer has opened its IPOs for institutional investors with a deadline of 26 November 2023, imposing a cut-off price of NPR401/unit (US$3.00/unit) and a ceiling price of NPR601.50/unit.

The Securities Board of Nepal (Sebon) has given its approval for Sarbottam to float 12.9033 per cent of its issued capital of NPR4.65bn. Of the proposed 6m units of primary shares, the company has floated 2.4m units at the book building price in the first stage. 

Book building is the process by which an underwriter attempts to determine the price of a company’s IPOs. An underwriter, usually an investment bank, builds a book by inviting institutional investors such as merchant banks, mutual funds, listed companies, security traders and other entities recognised by the Sebon to submit bids for the number of shares and the prices they would be willing to pay for them, explains myRepublica. 

Sarbottam Cement, part of the Saurabh Group, runs an integrated plant in Ramnagar with a cement production capacity of 0.99Mta and clinker capacity of 1.16Mta.