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Kasthamandap Development Bank Ltd. annouces IPO from 17th Nov 2009

Published by Octron on November 6, 2009

Kasthamandap Development Bank Ltd. is established under the Bank and Financial Institution Act,2063 in Kathmandu Municipality of Kathmandu district as a national level, ‘B’ class development bank. The bank is releasing IPO from 17th Nov 2009 till 20th Nov 2009. NIDC Capital Markets has been appointed as share registrar and issue manager for this IPO.

Out of 320 Million Rupees Issued capital, 70% will be promoters shares (i.e. 224 Million Rupees) and 30% (i.e. 96 Million Rupees) will be generated through this IPO. Out 960,000 units of shares, 39,400 units of shares have been reserved for the company staff. Each unit share of share has a face value of Rs. 100. Applicant’s can apply minimum for 50 units of share and maximum 4,80,000 units of shares.

Capital Structure

Authorized Capital NRS. 640.00 (Million)
Issued Capital NRS. 320.00 (Million)
Paid–up capital NRS. 224.00 (Million)

The working area of the bank, as per the guidelines of the central Bank, will be whole Nepal.The bank will thus, be effortful in performing its banking activities and services all over Nepal in a phase wise manner.

The bank has already spanned across the nation with 12 branches with central office located in Pako, New Road, Kathmandu. The bank have already garnered good client base not just in the urban valley like Kathmandu, Pokhara and Chitwan but has its branches operating in remote towns like Gulmi, Solukhumbu, Parbat, Myagdi, Rupandehi, etc.

Out of 23 promoters, 6 promoters from Gulmi holds above 1 lakh units of shares. Mr. Jagannath Gyawali (Chairman), Mr. Krishna Prashad Gyawali (Director), Dr. Rajan Amatya (Director), Mr. Kedar Nath Shrestha, Mr. Utsav Kumar Amatya are some major promoters who have sound financial knowledge and experience on banking/investment solutions. Mr. Srawan Kumar Rajbhandari (M.A), one of the promoters is leading the management team as Chief Executive Office in Kasthamandap Development Bank Ltd. As per the notice published along with IPO announcement, he has more than 26 years of experience in Banking Field.

Financially, the bank is in the profit, but not as much expected. In FY 064/65 the bank made Rs. 2,69,000 profit after deducting all taxes, while in FY 065/66 (Unaudited) the bank made Rs. 6.5 million profit. For the current fiscal year (066/67) the bank is expected to make a huge profit 20.40 Million profit.

For details regarding its financial statements and sample application form click here.

Verdict: Though the bank is just a couple of years old, with its current rate of expansion and profit returns, investing in its IPO seems a pretty safe bet. Much better than Vibor Bank.

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