Reliance Spinning Mills Resumes IPO Issuance for Nepalis Working Abroad from Today

Reliance Spinning Mills has resumed the issuance of 10 percent of its long-delayed initial public offering (IPO) to Nepalis working abroad, beginning Monday.

The IPO process—halted since July 10, 2024—was reopened after the Securities Board of Nepal (SEBON) recently lifted the suspension. The company, which has received approval to issue shares under the book-building method, will offer shares to the general public at Rs 820.80 per unit.

The company had earlier sold shares to qualified institutional investors at Rs 912 per unit. Under the book-building system, shares must be issued to the general public at a price 10 percent lower than the institutional rate. Reliance Spinning Mills had allotted 770,640 units of shares to qualified institutional investors on January 29, 2024.

The company has been granted approval to issue 1,926,600 shares—10.14 percent of its paid-up capital of Rs 1.90 billion—through the book-building method. Of the total, 40 percent is reserved for qualified institutional investors and 60 percent for the general public.

The company received approval on June 26, 2024 to issue 1,155,960 units of shares to general investors. It had initially scheduled the IPO for Nepalis working abroad to open on July 11, 2024, but SEBON suspended the issuance a day earlier on the directive of the Public Accounts Committee of Parliament.

The company will now issue the same portion of shares to Nepalis working abroad starting Monday, December 8. Applicants may apply for a minimum of 50 shares and a maximum of 20,000 shares. The subscription period will close as early as December 11 and may be extended until December 22 if undersubscribed. Global IME Capital Limited is the issue and sales manager. Applications can be submitted through ASBA member banks and financial institutions, their designated branches, and online through MeroShare.

CARE Ratings Nepal has assigned Reliance Spinning Mills the rating ‘CARE NP A– (Issuer Rating)’ for the IPO, indicating adequate capacity to meet financial obligations.

Financial performance improves

The company’s financial statements—updated as of June 26, 2024—and those published thereafter show improvement in key indicators. Investors had earlier objected after two separate prospectuses contained inconsistent financial data for the same fiscal year. The company has now incorporated updated figures in the prospectus published on December 6.

According to the latest audited financial report for FY 2024/25, Reliance Spinning Mills posted earnings per share (EPS) of Rs 27.87 and a net worth per share of Rs 250.80. As of the end of last fiscal year, the company reported accumulated profits exceeding Rs 5.82 billion.

The unaudited first-quarter report of the current fiscal year show accumulated profits above Rs 5.89 billion, an EPS of Rs 15.84 and a net worth per share of Rs 254.83.