Reliance Spinning Mills IPO Opens for the Public from Today; Issue Price Set at NPR 820.80 per Share

Reliance Spinning Mills Limited has opened its Initial Public Offering (IPO) for general investors starting today (December 23 / Poush 7). The company has issued the IPO through the book-building method at an issue price of NPR 820.80 per share.

Under the book-building process, the cut-off price for institutional investors was fixed at NPR 912 per share. After providing a 10 percent discount on the cut-off price, the issue price for general investors has been determined at NPR 820.80 per share.

As approved by the Securities Board of Nepal, the company is issuing 1,926,600 ordinary shares, which represents 10.14 percent of its issued capital. In the first phase, 770,640 shares were already allotted to institutional investors.

In the second phase, 115,598 shares were allotted to Nepalis working abroad. In the third phase, after excluding 57,798 shares reserved for employees, the remaining 924,768 shares have now been made available to the general public.

Investors can apply for a minimum of 50 shares and a maximum of 20,000 shares. The IPO will close as early as Poush 11 (December 27). If the issue is not fully subscribed within this period, the deadline may be extended until Poush 21 (January 6).

Applications can be submitted through C-ASBA member banks and financial institutions, their branch offices, and the ‘Mero Share’ online system. The issue and sales manager for the IPO is Global IME Capital Limited.

Credit rating agency CARE Ratings Nepal has assigned the company a CARE-NP Single A Minus issuer rating, indicating an adequate capacity to meet its financial obligations.

Established in 1994 (BS 2051), Reliance Spinning Mills operates its major production facilities in Itahari and Duhabi of Sunsari district. The company is recognized as one of Nepal’s leading yarn producers and major employers. Around 70–75 percent of its yarn production is exported to countries including India, Turkey, Vietnam, and the United Kingdom. The company is chaired by Pawan Kumar Golyan, with Akshay Golyan serving as Managing Director.

The company has stated that the funds raised from the IPO will be utilized for expanding cotton yarn and polyester-cotton yarn production capacity, purchasing modern machinery and equipment, and acquiring land and constructing buildings.

According to the financial statements, the company recorded an earnings per share (EPS) of NPR 27.87 and a net worth per share of NPR 250.80 in FY 2081/82. The company has remained profitable through the first quarter of the current fiscal year as well.

Following share allotment, Reliance Spinning Mills’ shares will be listed on the Nepal Stock Exchange. Based on NEPSE regulations and the company’s actual net worth per share, the estimated opening trading range is expected to be between NPR 250.80 and NPR 752.40.

Given its export-oriented business model, long operational history, and profitable financial performance, Reliance Spinning Mills may be considered a company worth evaluating for medium- to long-term investment. However, as the IPO has been issued at a premium price, investors are advised to assess the associated risks carefully before applying.