Reliance Spinning Mills Sees Nearly Sixfold Oversubscription on First Day of IPO

Reliance Spinning Mills has seen strong investor interest in the shares it is offering to Nepalis working abroad, receiving nearly six times more applications than the allotted quota on the first day.

The company opened its initial public offering (IPO) on Monday under the book-building method, pricing each share at Rs 820.80. According to issue manager Global IME Capital Ltd, the tranche allocated for Nepalis working overseas was oversubscribed within the first 30 minutes of opening.

On the first day alone, applications from this category reached 5.82 times the available shares. CDS and Clearing Ltd reported that, as of 7 pm Monday, 13,442 applicants had sought a total of 788,730 shares.

Reliance has been permitted to issue 1,155,960 shares to the general public, of which 10 percent—115,596 shares—are reserved for Nepalis working abroad.

With demand already exceeding supply, the issue will remain open only until December 11. Earlier, the company sold 770,640 shares to eligible institutional investors at Rs 912 per share. It is offering shares to the general public at a 10 percent lower price of Rs 820.80 per share.

The Securities Board of Nepal has approved the company to issue 1,926,600 shares—equivalent to 10.14 percent of its paid-up capital of Rs 1.90 billion. Of the total shares, 40 percent is allocated to qualified institutional investors and 60 percent to the general public.

Reliance said investor enthusiasm has surged, particularly as this is one of the first IPOs to hit the market after a 17-month pause. A senior company official said general investors were encouraged by the opportunity to invest at a price 10 percent lower than that bid by qualified institutional investors. “To uphold the confidence of investors, the company is committed to delivering on its projected plans,” the official said.

Reliance is Nepal’s largest yarn manufacturer, exporting 70 to 75 percent of its production to India, Turkey, Vietnam, the UK and other countries.