Trade Tower to launch Rs. 330 million IPO from May 28

KATHMANDU, MAY 19: Trade Tower Limited is set to open the sale of its Initial Public Offering (IPO) worth approximately Rs. 330 million to the general public from May 28. Earlier, the company had issued IPO shares worth around Rs. 40 million to Nepali citizens working abroad.

The company plans to utilize the funds raised from the general public to repair the building’s roof and repay bank loans and interest. Of its total issued capital of Rs. 815.6 million, Trade Towe is offering 48.696 percent, equivalent to 3,971,693 shares valued at Rs. 397.17 million, to the public.

Out of this, 10 percent—or 397,169 shares worth approximately Rs. 39.72 million—has already been sold to Nepali citizens working abroad. Additionally, 79,433.86 shares worth around Rs. 7.94 million have been reserved for company employees, and 198,584.65 shares have been allocated to mutual funds.

The company is now set to issue 3,296,505 shares to the general public at a face value of Rs. 100 per share. This offering follows the allotment of shares to Nepalis employed overseas.

According to the company's published prospectus, the proceeds from the IPO will be used to repay principal and interest to banks and repair the dome and roof of the Trade Tower building.

Trade Tower Ltd. owns and leases out two commercial complexes located in Thapathali and Gaushala respectively. The IPO is being issued primarily to repay debts incurred during the construction of these buildings.

Of the total Rs. 397.17 million to be raised, the company plans to use Rs. 300 million to repay loans and interest to Laxmi Sunrise Bank. An additional Rs. 90 million will be invested in expanding Hotel Crystal Pashupati, adding hotel rooms, and introducing spa services. The remaining Rs. 7.17 million will be used for repairing the dome and roof of the Thapathali Trade Tower building.

The IPO application window will remain open until June 2, and if undersubscribed, it will extend until June 11. Applicants can apply for a minimum of 10 shares and a maximum of 1,000 shares. Applications can be submitted through C-ASBA-approved banks and financial institutions or via the MeroShare platform.

The issue manager for the IPO is Laxmi Sunrise Capital Limited.

ICRA Nepal has assigned the company’s IPO an ICRA NP Double B Minus (Issuer Rating), indicating a moderate credit risk in fulfilling financial obligations on time.

Financial overview

While Trade Tower's income has shown growth in recent years, its net worth has declined. In fiscal year 2021/22, the company posted a profit of Rs. 13.86 million, whereas as of mid-January in the current fiscal year 2024/25, it has already recorded a profit of Rs. 56.05 million. During this period, the company’s net worth per share stands at Rs. 113.35.

However, the company anticipates a gradual decline in net worth per share over the next three fiscal years.

Currently, Trade Tower’s issued capital is Rs. 815.6 million, which will increase to over Rs. 1.21 billion after the IPO is fully subscribed.