Reliance Spinning Mills Limited (RSML), Nepal's largest spinning mill, has opened a significant Initial Public Offering (IPO) using the book-building method, a rare approach in the Nepalese market. The offering is being conducted in phases, with the first tranche now open exclusively to Nepalese citizens working abroad.

IPO Structure & Phases:

1. Phase 1 (Completed): 40% of the total issue (770,640 shares) was allotted to Qualified Institutional Investors (QIIs) in early 2024 at a cut-off price of Rs 912 per share.
2. Phase 2 (Current): 10% of the public issue (115,596 shares) is now open for subscription from Foreign Nepalese Employees (Nov 22-25, 2025, with possible extension).
3. Phase 3 (Upcoming): The remaining 90% (1,040,364 shares) will be offered to the general public at a later date.

Key Issue Details:

• Total Issue Size: 10.14% of issued capital (1,926,600 shares).
• Price for General Public: Rs 820.80 per share (10% discount to the QII cut-off price of Rs 912).
• Lot Size: Minimum 50 units, maximum 20,000 units.
• Issue Manager: Global IME Capital.

Company & Market Context:

• Industry Leader: RSML is Nepal's largest spinning mill with over 4,300 employees and an annual production capacity of 40,680 MT of polyester, viscous, and acrylic yarn, primarily for export (India, Turkey).
• Credit Rating: Maintains an 'A-' (Adequate Safety, Low Credit Risk) rating from CARE Ratings Nepal, though it remains under credit watch with developing implications.
• Market Precedent: This is only the second IPO in Nepal to use the book-building method, following Sarbottam Cement, indicating a modernization of the country's capital markets.

Strategic Significance:

• Market Innovation: The phased, book-building approach aims to ensure proper price discovery and institutional participation before public listing.
• Diaspora Inclusion: Prioritizing non-resident Nepalese (NRN) workers taps into a significant source of foreign remittance investment.
• Industrial Growth: The capital raised will support the expansion of a major export-oriented manufacturing company, aligning with Nepal's industrial development goals.

Investment Considerations:

• Pro: Entry price is at a 10% discount to the price paid by institutional investors, offering an immediate paper gain for retail subscribers.
• Con: The company's credit rating is under watch, indicating some financial or operational uncertainties that warrant monitoring.
• Market Appeal: As a large, established industrial player, the IPO is likely to attract strong interest from both retail and institutional investors in Nepal.

Bottom Line:
Reliance Spinning Mills' IPO is a landmark event for Nepal's capital markets, showcasing an advanced offering structure. It represents a strategic opportunity for investors to gain exposure to a leading industrial exporter while supporting domestic manufacturing. The success of this book-building issue could pave the way for more sophisticated capital-raising efforts by other large Nepalese companies. Investors should weigh the discounted entry price against the company's credit watch status and broader sectoral risks.