Industrial Districts Management (IDM) to revise rent in industrial districts

Industrial Districts Management (IDM) Ltd will fix a new rate for the rent of land and buildings inside industrial districts within a week.

Due to growing complications regarding the revision of the rent, IDM has decided to form a seven-member committee with representation of three industrialists to discuss on the revised rent.

“We have already requested the industrialists to forward the names of their representatives to sit for a dialogue with representatives of the management to revise the current rent of land and buildings of industrial districts,” said chairman of IDM Devendra Kumar Yadav.

There are 11 industrial districts in the country and IDM is responsible for their management. “Rent at industrial districts has not been revised for a long time and we will come forward with a revised rate within a week after the committee is formed,” he said.

According to Yadav, infrastructure at industrial districts has become obsolete and needs renovation according to present requirements. “We plan to increase the rate only to modernise current infrastructure for its sustainability,” he said. He also added that industrial districts are the responsibility of IDM and it needs to take care of the infrastructure.

The current rent for one ropani land at the industrial districts is Rs 450 per month, which is quite low and it must be revised for infrastructural development of the industrial districts, says IDM. However, industrialists have blamed IDM for making an arbitrary decision to hike the rent.

According to the Federation of Nepal Cottage and Small Industries, IDM has tried to increase the rate by 850 to 1400 per cent, which is not acceptable. “The decision to increase the rent was arbitrary, hence it is not acceptable,” said general secretary of the federation Bishnu Bahadur Luitel.

He said that it would be difficult for industrialists to pay the rent with such an instant huge hike. The federation has also requested concerned authorities to address the issue of unusual rent hike.

Source: THT

Deposit and Credit Guarantee Corporation (DCGC) wants Rs 500m to boost paid-up capital

Deposit and Credit Guarantee Corporation (DCGC) has asked for Rs 500 million from the government to increase its paid-up capital to Rs 1.5 billion. The paid-up capital is planned to be boosted to Rs 2 billion in the next fiscal year.

DCGC, which has insured deposits worth Rs 216.8 billion of around eight million depositors, has been seeking funds from the Finance Ministry to enlarge its financial strength.

“As it is part of increasing the paid-up capital of DCGC to Rs 2 billion eventually, we expect the government to provide the money soon,” said Bishnu Babu Mishra, manager of DCGC.

All the commercial banks, development banks and finance companies have insured their individual deposits up to Rs 200,000 at DCGC. The government gave the corporation Rs 500 million in the last fiscal year.

DCGC has been insuring deposits up to Rs 200,000 held at banks and financial institutions since the last two years to secure them if they should get into trouble.

Deposit insurance was seen as being essential after Nepal Development Bank was liquidated in 2009.

After DCGC entered the business of insuring deposits, its earnings have also increased. In the last fiscal year, its net profit stood at Rs 200 million, up from Rs 60 million in the previous year. It expects its profit to rise to Rs 500 million in this fiscal.

Before DCGC started deposit insurance, its revenue had been declining with the phasing out of primary sector lending.

Source: The Kathmandu Post

Sipring Khola Hydro offers 5pc shares to locals

Sipring Khola Hydroelectricity Project (SKHP), which currently under trial production, has decided to allot 5 percent share to the residents of local villages.

The 10MW project has claimed that Gauri Shankar and Kharegaun VDCs will get around Rs 16 million annually in dividends after five years. The project has estimated to earn an annual profit of Rs 320 million five years after repaying loans to banks.

“It is matter of happiness for the people to be able to receive such a large amount annually,” said VDC Secretary Samsher Karki, who was heading to the Company Registrar Office to receive a share certificate.

Addressing a programme here on Thursday, the project’s managing director and Synergy Power Development’s chairman Bishnu Adhikari said the liability of providing shares free of cost to the locals would be borne by the company itself.

SKHP’s move is believed to set an example for other projects operating in the district. There are five other hydro projects planning to start construction in the region. Upper Khani-Khola (50 MW), Khani-Khola (30 MW) and Mid Khani-Khola (24 MW) are in final construction stages. Two other projects are expected to be completed within the next three years.

If all these projects are completed within the stipulated time there will be a total of 120MW of electricity generated from the region. And if all these projects also offer 5 percent share to locals, residents of Gauri Shankar, Khare, Marbu, Chankhu and Sura VDCs will be getting around Rs 200 million every year in dividends.

Adhikari said they would pay off all their debt in the given time as the project cost was comparatively lower. According to him, they completed the project at Rs 130 million per unit. “That’s why we will be able to pay back bank loans within five years Adhikari said.”

Earlier, the locals had demanded free shares instead of one percent (around Rs 13.2 million) in social development contribution from the hydro project. As per the law, the projects have to spend one percent of their earning compulsorily for social development.

Following the agreement, the project spent Rs 1-1.5 million in social development and has converted the remaining amount into shares, said Balaram Thapa, a member of the stakeholders’ committee.

The project has also agreed to sell additional 10 percent shares to the people from affected areas. Earlier, Upper Tamakoshi (456 MW) which is under construction in the region, had announced to sell 10 percent shares to locals.

SKHP became ready to offer free shares to the locals following pressure from the local political parties and stakeholders’ committee. According to committee member Gokarna Joshi, the pressure worked in favour of the locals.

Source: The Kathmandu Post

Civil Bank opens largest private sector IPO

In the biggest initial public offering (IPO) launched by the private sector till date, Civil Bank is floating its shares to the public for the first time from Monday to raise Rs 800 million. If the bank is successful in raising the said amount from the primary market, the paid-up capital of the category ´A´ financial institution will top Rs 2 billion.

“We are very optimistic about the IPO and hope it will be oversubscribed by at least three times,” Kishore Maharjan, CEO of the bank, told Republica on the sidelines of a press meet organized in Kathmandu on Sunday.

The bank is floating eight million units of shares with the face value of Rs 100 each. These shares are being issued by Citizens Investment Trust, Nabil Investment Limited, NCM Merchant Banking and Ace Capital Limited, which have been appointed issue managers for the IPO.

“Of the total number of shares that are up for grabs, five percent have been allotted to institutional investors and another five percent have been issued to staff,” Govinda Gurung, senior executive officer of the bank, told the press meet. “So we can say Rs 80 million has already been raised.”

Once the shares are successfully distributed, the promoters of the bank will hold 60 percent stake in the bank with the rest going to the public.

“We think investors who buy shares from the primary market will be able to earn good returns as the price of each share is expected to shoot up to a range of Rs 150 to Rs 200 soon as the stocks are listed on the stock market,” Civil Bank Chairman Iccha Raj Tamang told the press meet.

As per the rules of Securities Board of Nepal (Sebon), the bank´s shares will have to be put up for sale on the primary market for at least four days. If the shares are not fully subscribed, the bank can extend the IPO for up to 15 more days.

“We are hopeful the IPO will wrap up in first four days as there are not many investment avenues to cater to the pent-up demand,” CEO Maharjan said. “Besides, the bank´s financial health is also sound.”

The bank, which was established around two years ago, does not hold any bad debt and has a capital adequacy ratio — a measure of capital reserves against assets at risk — of 12.39 percent. “Once the shares floated to the public are subscribed, the bank´s capital adequacy ratio will hover at 15 percent, which will provide us with ample room to expand lending activities,” Gurung said.

The bank, which mobilized Rs 10.34 billion in deposits till the end of the first quarter of the current fiscal year, extended Rs 9.15 billion in loans by the end of the first quarter. It is planning to raise deposit base to Rs 23.61 billion and expand credit portfolio to Rs 19.65 billion by the end of the fiscal year 2014/15.

“By that time earning per share of the bank will rise to Rs 14.05 (from Rs 1.9 in the first quarter of the current fiscal year) and gross assets will rise to Rs 27.06 billion from Rs 11.96 billion of present,” Gurung said.

Source: Republica

Weekly updates (29 April to 3 May, 2012)

Local bourse plummets amid the review period of this week as higher volatility was felt triggering both upside and downside circuit break for most of the time. Parties agreement to make the combine government pulled the market while others news pulled the leg. The benchmark Nepse index lost 18.75 points to settle at 404.25 while the sessions’ high was on Sunday with 423.00 and lowest was on Wednesday with 384.39.

Banking sector holding the heavy volume of trade in Nepal Stock Exchange descends 15.92 points to close at 396.17. Others sector suffered the heavy loss of 71.65 points to respite at 539.30. Similarly, Hydropower sector plummets 21.24 points to 625.18. However insurance sub-indices gained 12.21 points to 475.77. Finance sector escalates 2.83 points to 269.94. Development bank added modest of 0.41 points along with 0.23 points up in manufacturing sector to 667.28.

Sensitive index close negative of 5.64 points to close at 102.40 while float Index indicating the performance of ordinary shares in the market downhill 0.91 points to 32.65.

Total of Rs. 329497320 was realized during the week from 931019 units of share through 4831 transactions. The highest gainer for the week in terms of total turnover and highest amount of trade was booked by National Hydropower Co. while with 515 transactions stock of Bank of Kathmandu topped the chart.

Agricultural Development Bank Limited has posted net profit of Rs.688.26 and published its second quarter company analysis of the fiscal year 2068/69.

Agricultural Development Bank Limited has posted net profit of Rs.688.26 and published its second quarter company analysis of the fiscal year 2068/69.

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Api Finance Limited is distributing 5 percent bonus share certificate to its shareholders from today (26th Magh 2068).

Api Finance Limited is distributing 5 percent bonus share certificate to its shareholders from today (26th Magh 2068).

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