More than 25,000 investors applied for Bhutan National Bank and Royal Insurance Corporation shares in the last one month. The shares were held in the name of Sungchop fund and Kidu fund. The proceeds from the sale of shares will go to the National Resilience Fund for continuing income and interest payment support under the Druk Gyalpo’s Relief Kidu.
The auction which ended on Thursday saw more demand than supply. The shares were oversubscribed. For about 35 million BNB shares for sale, investors bid for more than 70 million shares. And for over 15 million RICB shares, people bid for over 25 million shares. More than Nu 2bn was collected from the investors.
The Royal Securities Exchange announced the sale of shares between June 15 and July 15. The floor price which is the minimum price was Nu 33 for a BNB share and Nu 70 for a RICB share. The final price remained the same although during the auction people quoted as high as Nu 200 per share.
“The allocation is based on the principle of equal allocation. That means the first minimum bid will be taken care and respectively it will go to the higher bids. For this exercise just now, since the price is the floor price 33 and 70. So there is no question of disqualification. Now it’s only about allocation. So how do we allocate? Given your first, everybody will get the minimum order. So if the minimum order is 10, 10 thousand shares bidders will get 10 each first, then it will go to the next minimum order, then next minimum order until it exhausts,” said RSEBL’s CEO, Dorji Phuntsho.
That means everyone who applied will get their share. Those who bid higher than the final price will be refunded.
“So this is the first time we are having a huge volume in the market and for us, it was very important that we disseminate the information and provide the opportunity to every Bhutanese from all walks of life and to do so we have also requested the National CSI development bank through their community centres, we have disseminated the information on the availability of offer of sale. And we also encouraged at the village level to participate in this offer,” added Dorji Phuntsho.
The amount collected is to help people during the pandemic.
Samten Dolkar/Sangay Chezom
Edited by Tandin Phuntsho
