Nepal Infrastructure Bank Limited (NIFRA) IPO ISSUE

NIFRA BANK IPO ISSUE 

It has been almost two years since the establishment of Nepal Infrastructure Bank Limited (NIFRA) with a larger capital than other banks in Nepal. The Infrastructure Bank, which has the main objective of accelerating the infrastructure development, had started its financial transactions on February 8, 2075 BS by obtaining a license from Nepal Rastra Bank.

New Biggest ever IPO Issue of NIFRA - Nepal Infrastructure Bank | IPO KHABAR

The bank, which does not accept small deposits, has so far invested Rs 8.35 billion. Many of these loans have been invested in hydropower projects.

The bank said there was a demand for loans for hydropower projects even amid the Corona epidemic. According to the bank, there is demand for investment in solar energy, cement and hotel industry after hydropower.

The bank has so far invested Rs 5.40 billion in four 110 MW hydropower projects and Rs 1 billion in 20 MW solar power projects. Similarly, the bank has invested Rs 1.5 billion in the cement industry and Rs 450 million in five-star hotels under construction.

Acting Chief Executive Officer of the bank Bhupendra Pandey says that about Rs 4 billion was invested in the pipeline last year. According to him, an average investment of Rs 30 billion has been demanded in the current fiscal year.

Introduction

Nepal Infrastructure Bank Limited (NIFRA) is established as a National Level Infrastructure Development Bank with the focused objective of accelerating the development of infrastructure of the nation. The Bank obtained the operating license from Nepal Rastra Bank (Central Bank) on February 11 2019 (2075/10/28 B.S.) and started its commercial operation from March 6 2019 (2075/11/22 B.S.).

Being the first Infrastructure Development Bank of the nation, the bank aims to bridge the infrastructure financing gap by raising resources from domestic and international market through innovations like: establishing Equity, Debt, Mezzanine and Sector Fund Structures, Issuing On-shore and Off-shore Bonds and Debenture, etc. and applying such funds into economically viable infrastructure projects by adopting proven models of infrastructure financing like Public Private Partnership (BOOT/BOT), Viability Gap Funding (VGF), Hybrid Annuity Models (HAM) and Securitizing Assets. 

VISION of NIFRA BANK

To be the nodal financial institution of the nation for infrastructure development.

MISSION OF NIFRA BANK

To accelerate investment in infrastructure.
To bridge the financial gap for unlocking development potential.

NIFRA has been established with the investment of the government, commercial banks, life insurance companies, non-life insurance companies, public and private companies and reputed businessmen to accelerate the infrastructure development and reduce the financial deficit in other areas of development.

NIFRA Bank capital and assets

NIFRA has an authorized capital of Rs 40 billion and an issued capital of Rs 20 billion. The paid up capital has been fixed at Rs 20 billion. The current paid up capital is Rs 12 billion, but by issuing ordinary shares worth Rs 8 billion to the public, the paid up capital will reach Rs 20 billion. Nepal Infrastructure Bank (NIFRA) Ltd is issuing initial public offerings (IPO) for people in general from January 15.

According to the NIFRA, it is planning to issue 80 million units of shares worth Rs 8 billion. This is the biggest IPO ever issued in the Nepali market of the Securities Board of Nepal. Of the total IPO, 0.20 percent or 160,000 units of share will be allocated for company staffers, 5 percent or 4 million units of shares for collective mutual fund while 75.840 million units of shares will be allotted for general public.

Willing applicants can apply for the IPO from January 19. The deadline for the application will be extended until January 29 if the company did not receive the required number of applications.

The bank, currently, has 12 billion in paid-up capital. With the issuance of IPO worth Rs 8 billion, its paid-up capital will reach 20 billion.The founding shareholders, including the government, own 60 percent of the bank. After the issuance of IPO, the public's share will reach 40 percent. This bank does not take deposits of less than Rs 10 million. At present, the bank has not paid attention to deposit collection as its capital is very large.

WHO IS THE IPO ISSUE MANAGER OF NIFRA BANK?

NIBL Ace Capital limited has been appointed as the Securities Issuer and Sales Manager for the issuance of IPO by Nepal Infrastructure Bank Limited which is the first and only infra sector bank in Nepal to issue such a massive volume of shares.