Why IPO is issued on Friday only?

Kathmandu. 

Jyoti Life Insurance is going to open the application for ordinary shares (IPO) to the public from next Friday by changing the pre-determined time. Earlier, the IPO issuance, which was supposed to start from Sunday, has been postponed by Jyoti for two days and will start from Friday.

The company is about to issue 6.6 million IPOs worth Rs 660 million. Out of 6.6 million shares, 5 percent or 333,000 shares have been secured for employees and another 5 percent for collective investment funds.

The IPO issue and sale manager is NMB Capital Limited. The general public will be able to apply for the remaining 5.94 million shares. The company is going to issue 30 percent of the total issued capital.

The women's microfinance financial institution, which had issued an IPO before the company, had also opened its application from Friday, making pre-determined changes.

Not only these two companies but most of the companies issuing IPOs after Corona have opted for Friday. Mekh Bahadur Thapa, president of the Nepal Merchant Bankers Association, says that the number of visitors on Friday will be much less than other days. "The office is closed earlier on Friday than other days. Due to the low number of visitors, it has been chosen on Friday," said Thapa.

'Load management is difficult'

Santosh Neupane, spokesperson of CDS & Clearing Ltd., which keeps track of all share transactions, says that there is a problem in load management due to the large number of applicants. He said that there was a problem when many people tried to open the CDS website at the same time.

Investors now have to apply for an IPO by going to 'My Share' on CDS's website.

Due to the large number of applicants, the system is shut down from time to time. The reason for this is the inability to manage loads.

Share trading takes place only from Sunday to Thursday except public holidays. Spokesperson Neupane says that if there is too much load on the trading day, there may be problems in the daily trading system. He said that the IPO application will be opened on Friday as there will be no business on Friday and the load will be less.

"We have asked you to open the application on Friday so that there is a problem in the trading settlement and other work will not be affected," said spokesperson Neupane.

If you want to strengthen the system, you don't have to wait until Friday to apply for an IPO. But now there are problems due to lack of adequate resources, he said. He also said that CDS is working for its improvement.

‘We have to make it very comfortable, but it takes some time,’ he says, "We start on Fridays until we are not strong enough, then it doesn't matter, we will open on any day."