Big draw of Rs. 500 m Cargills Bank IPO; oversubscribed by three times

The Cargills Bank Ltd.,’s Rs. 500 million worth Initial Public Offering (IPO) has been oversubscribed by nearly three times.

When the IPO closed on its official opening day itself on 14 December, there had been 2,019 applications requesting for 183.8 million shares worth Rs. 1.47 billion.

The IPO involved 62.5 million shares at Rs. 8 each.

It was the first IPO by a commercial bank in a decade. The quantity offered amounts to 6.61% of the ordinary voting shares of the Bank post-IPO with the previous one being Amana Bank.

Reflecting retail demand, applications with bank drafts and cheques accounted for most 1,189, requested for 124.5 million shares worth Rs. 996.1 million. 

Applications with payment via RTGS/SLIPS/CEFTS transfers amounted to 822 requesting for 37.8 million shares worth Rs. 302.7 million. There had been eight applications with bank guarantees with a request for 21.47 million shares worth Rs. 171.8 million.

As per the prospectus 50% of the shares on offer or 25 million shares were to be allotted to retail individuals. The IPO had 1,541 valid applications requesting for 9.6 million shares. There had been 2 applications from Unit Trust which had been promised 10% stake (6.25 million) but had requested 5.125 million shares. Non-retail (50% or 31.25 million), there had been 464 applications requesting 168.9 million shares.

As per the basis of allotment, retail individuals and unit trust will get 100% of the offered shares applied for. In the non-retail category, applications up to and inclusive of 25,000 shares will get 100% as well. Those who submitted applications to subscribe to over 25,000 shares will get 100% of the first 25,000 and 23.34% of the shares applied for in excess of 25,000. Any excess of deficit of shares after the allotments to be adjusted to the largest non-retail applicant.

Co-managers to the IPO were NDB Investment Bank Ltd., and CT CLSA Securities.