Reliance Spinning Mills is under investigation for its IPO as lawmakers raise concerns about its finances. In a recent parliamentary meeting, a member of parliament Dipak Khadka from the Nepali Congress asked why the company is permitted to issue shares at premium prices when other initial public offerings (IPOs) are being put on hold.
The Securities Board of Nepal (SEBON) approved the IPO at Rs 820.80 per share, despite the chairperson position being vacant after the retirement of the previous chairperson, Ramesh Hamal.
Accusations have been raised that the company changed its financial details, hiding a Rs 753.68 million debt and raising its earnings per share (EPS) to Rs 54.34 when the actual value is Rs 2.08. The committee has asked SEBON to explain what is wrong.
Reliance Spinning Mills was set to issue shares to Nepalese citizens working abroad after selling shares to institutional investors at Rs 912 per unit. However, experts suggest that due to the company’s debt, the IPO price should not exceed Rs 538.35 per share.
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