FPO

Rajesh Sharma

FPO

Now FPO has become the talk of the town. Many are talking as if it is a means of loot and any company could issue FPO. This is not the case. No commercial bank other than SCB has this privilege anymore as all others have 70:30 ratio. EBL, SBI also could not issue FPOs.

Yes, shares could be issued adding premium in several foreign countries. However, as of now we have no such legal provision. If new act comes into operation or NRB does something using its regulatory power to formalize/legalize this issue is different. So, the guesswork/speculation is not true.

In insurance sector, it is not specifically clear where the ratio is 70:30 or lower. Hence, there is room for ambiguity. May be, new Insurance Act will make it clear. In case if it is 70:30, companies like NLIC, PICL, LICN etc could issue FPOs.

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7Bastola Baburam, Maharshi Shrestha and 5 others

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Ratna Kumar Badal Sir, i feel fortunate that I'm being able to read your views which are very informative and logical.
Sir, there are some banks which have 51:49 promoter to public share holding ratio. Therefore, my question is why other banks could not issues FPO to raise money and decrease their holding to 51 from 70?? I hope your kind insight.

Like · Reply · Yesterday at 05:25

Rajesh Sharma They could convert their 19% promoter shares into ordinary shares to bring the ratio to 51:49 as per the directive of NRB. This is already in existence. Hence, this is done without injecting new capital. So, no FPO.

Like · Reply · 1 · Yesterday at 06:13

Ratna Kumar Badal Thank you so much sir.

Like · Reply · Yesterday at 07:10