KATHMANDU, 28 MAY 2013 (ekantipur)

Mega Bank will be making its initial public offering (IPO) worth Rs 699 million on June 2. It will issue 6.99 million shares to the public at par value of Rs 100 per share.

The bank’s chairman Madan Kumar Dahal said that it would issue 30 percent of its paid-up capital to the public through the IPO. Its paid-up capital is Rs 2.33 billion. With the IPO, the bank has aimed to add over 100,000 shareholders. It presently has 1,219 promoters from 63 districts.

Mega Bank ’s chief executive officer Anil Keshari Shah said the bank would set up 133 collection centres in 40 districts to make it convenient for people from rural areas to subscribe to the bank’s shares. “We want students, farmers and other general people to come as shareholders in the capital market in addition to regular investors,” added Shah. He expressed the hope that the share issue would be oversubscribed.

Mega Bank has appointed NIBL Capital Markets, Citizen Investment Trust, Nabil Investment and NMB Capital as the sales and issue managers.

As of mid-April, the bank had collected deposits of Rs 12.84 billion while it has provided loans worth Rs 11.87 billion. It has been providing banking services to 101,150 people. It maintains 28 branch offices, mega remit services in 500 locations and branchless banking in 45 villages across the country. Through its mega micro scheme, it also offers its services to rural people who lack access to banking services.

Recently, the bank has also launched the Mega IPO Savings Account as a prelude to its IPO to make it convenient for potential subscribers to deposit their application money. The account can be opened with a minimum balance of Rs 5,000. As subscribers have to apply for at least 50 shares, the bank has fixed the minimum balance at Rs 5,000.

According to Mega, it is giving priority to investing in agriculture, small and medium enterprises, tourism and energy related areas. “Out of our 28 branch offices, 13 are located in rural areas including Syaphrubesi, Rasuwa,” Dahal said.

As of the first nine months of the current fiscal year, the bank’s net profit was Rs 130 million. Mega Bank earned a net profit of Rs 71.4 million in 2011-12.

Meanwhile, Mega Bank has come up with a scheme entitled Mega IPO Dhamaka to attract a greater number of subscribers. Under the scheme, depositors in the Mega IPO Savings Account who are not selected in the primary share allotment will be offered an annual interest of 9.5 percent for a period of 65 days. “The account holders will also be provided an overdraft facility of up to 90 percent,” said Shah.

According to the bank, the IPO will close on June 5 at the earliest. Mega has planned to complete the IPO allotment by the end of the current fiscal year.