…. RSEBL says shares will be allocated equally
Close to 26,000 bidders oversubscribed the Bhutan National Bank Ltd (BNBL) and Royal Insurance Corporation of Bhutan Ltd (RICBL) shares by 204 percent and more than 162 percent during the monthlong auction raising more than Nu 2 billion (B) altogether.
More than 14,400 bidders placed their orders for 71.91 million (M) shares of BNBL and more than 11,300 bidders sought 25.47M RICBL shares.
The RSEBL announced the sale of 35,240,867 shares of BNBL at a floor price of Nu 33, and 15,640,000 shares of RICBL at a floor price of Nu 70 on June 15. The discovered price of the shares remained at Nu 33 for BNBL and Nu 70 for RICBL. The highest bid for the shares went as high as Nu 200 per share.
The shares would be distributed equally, according to RSEBL Chief Executive Officer Dorji Phuntsho. Which means all bidders would be allocated shares.
“For those who bid higher, the remaining amount after deducting the discovered price would be refunded,” Dorji Phuntsho said.
To ensure that the opportunity to buy the shares was provided to every eligible Bhutanese, besides the brokerage firms, RSEBL sought help from the member financial institutions, community centres operated by National CSI Development Bank, and Bhutan Post offices in all the dzongkhags, the CEO said.
More than 4,000 bidders bought the shares through the community centres and 10,000 bidders applied through the RSEBL’s locally designed online system. Brokerage firms facilitated 25,800 bidders to buy the shares.
The share allocation process will complete on July 26.
The shares were held in the name of Sungchob Fund and Kidu Fund. The proceeds from the sale of shares will replenish the reserve for National Resilience Fund (NRF) for continuing income and interest payment support under the Druk Gyalpo’s Relief Kidu (DGRK).
Considering the ongoing difficulties Bhutanese face due to the pandemic, His Majesty The King commanded the continuation of the DGRK for 15 more months in April this year. Within 48 hours after the announcement, almost 5,000 people applied for DGRK.
His Majesty’s Kidu Fund has been used to grant Kidu to thousands of Bhutanese to alleviate hardships and provide the ultimate social safety net. The Sungchob Fund was established as a security fund for the country during times of need.
The NRF was set up in April 2020 to provide economic relief to people during the pandemic.
This is the first time the stock exchange handled such a large scale offer of sale. Dorji Phuntsho said, “The auction was a success.”