Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Palpa Cement Industries Ltd. on Friday began selling its first tranche of primary shares, reserving stock for residents of its plant and quarry districts as well as Nepalis working abroad, ahead of a full Rs 3.75 billion initial public offering scheduled later this quarter.
The company released 1.875 million units to “project-affected” locals of Nawalparasi West (factory site), Palpa (limestone quarry) and Devdaha municipality in Rupandehi, and 562,500 units to migrant workers. Both groups can apply for a minimum of 10 shares and a maximum of 100,000 shares at the par value of Rs 100 each, according to issue manager Nabil Investment Banking.
Locals must submit applications between 23 January and 8 February, while overseas Nepalis have until 14 January for early-bird and 23 January for final submission through the Meroshare online platform. Paper forms for residents are accepted at designated branches of Nabil Bank, Prabhu Bank and Siddhartha Bank in Palpa, Bardaghat and Parasi.
Upon completion of the local tranche, Palpa Cement will float 7.5 million shares—20 percent of its Rs 3.75 billion paid-up capital—to the general public, making it the only cement manufacturer in Nepal to price its IPO at par. Four other cement producers already trade at premiums on the Nepal Stock Exchange.
Financial healthThe company, which markets OPC, PPC and PSC cement under the “Tansen” brand, posted a net profit of Rs 973 million for fiscal 2023/24, up from Rs 698 million the previous year. Annual revenue remained flat at Rs 4.11 billion, while finance costs dropped to Rs 558 million after banks cut lending rates. Long-term borrowings stood at Rs 5.66 billion at year-end. Net worth per share, including revaluation reserves, is Rs 135.74; excluding reserves it is Rs 119.
Operational profileThe Sunwal-based plant can produce 1,800 tonnes of clinker and 2,200 tonnes of finished cement daily, exporting surplus to India. Chairman Rajesh Kumar Agrawal and co-promoter Vishnu Kumar Agrawal each own 36.12 percent of the firm; the founding group will retain 80 percent after the IPO, with the public holding the remaining 20 percent.
Market sources say the par-priced issue is drawing interest from value investors betting on infrastructure-driven cement demand, though analysts caution that debt levels and single-digit earnings per share of Rs 3.24 leave limited room for error.
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