First Business News Portal in English from Nepal
KATHMANDU: The CDS and Clearing Limited (CDSCL) has advised primary market investors not to invest in initial public offerings (IPOs) of listed companies in excess of the deposit they have in their bank accounts.
The CDSCL issued the investor warning following the Securities Board of Nepal’s (Sebon) suspension of the Ghorahi Cement IPO issuance process. The CDSCL press release states that “Anyone found in violation of the guidelines will face a serious action.”.
The primary shares of Ghorahi Cement were floated to the public on June 15. For the purpose of selling its IPOs, the company set a premium rate of Rs 435 per share.
The business sought to extend the final subscription deadline, claiming that many investors had withdrawn primarily because the amount of money in their bank accounts did not match the number of shares they had applied for.
To the general public, Ghorahi Cement issued 6,911,670 units of shares. 528,166 people submitted applications to buy the company’s IPOs worth Rs 14.057 million in just about a week.
According to Suresh Neupane, the CDSCL’s information officer, the front-line regulator was forced to act after it was discovered that the excessive applications were hindering the issuance process.
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