FPO investors verge on bearing loss, market price below issued price

Mar 27, 2018 Merolagani

Apparently, investors are not only bearing loss from secondary market transaction but also from investment in the primary market as in further public offering (FPO). On Monday, following the circuit break due to landslide in market, share price of most of the listed companies had declined. In the course, the market price of companies that issued FPO has declined below the issued price

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Out of the 10 companies that issued FPO, Pokhara Finance, Butwal Power, Nepal SBI Bank, Premier Insurance, Standard Chartered Bank, Nepal Life has fallen below the issued price. Only share price of Reliance Finance, Investment Bank, Shikhar Insurance and Nepal Grameen Bikas Bank are above the FPO issued price. 

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Based on the data till March 26, investor of Butwal Power Company and Pokhara Finance are bearing loss. The adjusted prices of the companies are at Rs 205 and 501, however, the secondary market prices of the stocks are at Rs 140 and Rs 436 respectively.

Similarly, the adjusted price of Premier Insurance, Nepal SBI Bank and Reliance Finance are at Rs 704, Rs 494 and Rs 91 respectively. Meanwhile, the market price of these shares is at Rs 710, Rs 516 and Rs 116 respectively. If the current bearish trend continues, investors of these shares will surly bear loss in upcoming days.  

Nevertheless, investors of Nepal Grameen Bikas Bank are at profit of Rs 338, given that the company issued FPO at a face value of Rs 100.

Similarly, the adjusted price of Shikhar Insurance after adjusting bonus shares of two FYs is at Rs 315. The investors seems to be in profit of Rs 575 based on the adjusted price, however, based on investment of Rs 650, they are at profit of 182 percent.  Likewise, investors of Investment Bank, Nepal Life and Standard Chartered Bank are in profit of 45.81 percent, 35.53 percent and 28.68 percent respectively. The market price of Investment Bank, Nepal Life and Standard Chartered has decreased to Rs 635, Rs 1545 and Rs 830 respectively. The companies issued FPO at Rs 601, Rs 1425 and Rs 1290 respectively.

 

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