Reliance Spinning Mills IPO Opens for the Public from Poush 7

Reliance Spinning Mills Limited is set to open its Initial Public Offering (IPO) for the general public from Poush 7. The company is moving ahead with the public issue after successfully completing the allocation of shares to Nepali citizens working abroad.

In the first phase, the company issued 115,596 shares to Nepalis with valid labor approval working overseas from Mangsir 22 to 25. Following this, Reliance received approval from the Securities Board of Nepal (SEBON) to issue a total of 1,155,960 shares to the public. Out of this, 57,798 shares have been reserved for company employees, and the remaining 924,768 shares will be offered to the general public.

The par value per share is NPR 100, while the IPO price has been fixed at NPR 820.80 per share through the book-building process. Investors must apply for a minimum of 50 shares, requiring an investment of NPR 41,040, while the maximum application limit is 20,000 shares. The IPO will close on Poush 11, and if it is not fully subscribed by then, the closing date will be extended to Poush 21.

This IPO is being issued under the book-building method. As per the Book Building Guidelines, 2077, 770,640 shares were allocated to qualified institutional investors (QIIs) through a bidding process, where the cut-off price was determined at NPR 912 per share. After providing a 10 percent discount, the public issue price was fixed at NPR 820.80 per share.

The issue and sales manager for the IPO is Global IME Capital Limited. Investors can apply through all ASBA-approved banks and financial institutions, their designated branches, and via the “Mero Share” online system operated by CDS and Clearing Limited using the C-ASBA facility.

Return Period and Credit Rating

CARE Ratings Nepal has assigned the company a CARE-NP Single A- (Issuer Rating), indicating an adequate level of safety and sufficient capacity to meet its financial obligations on time. The company’s simple payback period is estimated at 6.75 years, while the discounted payback period stands at 10.61 years.

IPO Resumes Following Court Clearance

Although SEBON had approved the IPO on Ashadh 12, 2081, the issue was temporarily halted due to legal disputes raised over valuation and issuance procedures. Reliance Spinning Mills filed a writ petition at the High Court, Patan, seeking a mandamus order. Following an interim order in favor of the company, SEBON granted permission to proceed with the IPO.

Company Overview

Established in 1997 (2054 BS), Reliance Spinning Mills is one of Nepal’s leading yarn manufacturing industries and one of the country’s largest employment-generating industrial enterprises. The company’s products are consumed domestically and exported to India, Turkey, and other international markets, with annual exports worth approximately USD 50 million. The company plays a significant role in supporting Nepal’s trade balance.

The company is chaired by Pawan Kumar Golyan, with Akshay Golyan serving as the Managing Director. Its main manufacturing plant is located in Itahari Sub-Metropolitan City–12, Khanar, Sunsari, while a branch facility operates in Itahari–4, Duhabi, Sunsari.

Capital Structure

Reliance Spinning Mills has an authorized capital of NPR 2.60 billion, an issued capital of NPR 1.90 billion, and a current paid-up capital of NPR 1.7844 billion following the allocation to institutional investors. After the completion of the public IPO allotment, the company’s paid-up capital will increase to NPR 1.90 billion.