Cargills Bank’s Rs. 500 m IPO snapped up

The Rs. 500 million worth Initial Public Offering (IPO) of Cargills Bank Ltd., has been oversubscribed on its official opening day which was yesterday.  The IPO involved 62.5 million shares at Rs. 8 each. Cargills Bank said the basis of allotment will be notified to the CSE in due course.

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 been Amana Bank.

The Net Asset Value (NAV) per share of the Bank as per the unaudited Interim Financial Statements as of 31 August is Rs. 12.88. As per the latest audited financial statements 31 December 2022, NAV per share is Rs. 11.01.

The IPO price was 0.62 times the NAV and reflects a discount of 20.19% to the average value Rs. 10.03 per share obtained via the valuation done by co-manager to the issue, NDB Investment Bank Ltd. The other co-manager was CT CLSA Securities, a part of Cargills Group. The CBL Board of Directors was of the opinion that the IPO price is fair and reasonable, and the discount is provided to investors eyeing a potential up-side on the investment.