Garima Development Bank Offers 212,834.65 Shares to the General Public

19th September 2025, Kathmandu

Garima Development Bank Limited has made a public offering of 212,834.65 promoter shares, a move that follows an initial, and only partially successful, offering to its existing promoter shareholders.

Garima Bank Promoter Shares

This decision is a standard procedure in Nepal’s capital market, which provides an opportunity for new investors to acquire a stake in the bank. Promoter shares are a part of a company’s capital that is held by its founders and major investors, and their sale can alter the ownership structure and the promoter-to-public shareholding ratio. The public has a 15-day window to submit applications at the bank’s central office in Lazimpat, Kathmandu.

The Public Offering Process

The offering is a two-step process. First, the bank offered the shares exclusively to its existing promoter shareholders, as is required by the Banks and Financial Institution Act, 2073 (2017). This initial phase, however, did not result in the full subscription of the shares. Consequently, the bank is now making the remaining shares available to the general public. This provides an opportunity for individuals who are not currently associated with the bank as promoters to become part of its ownership structure. The application process is straightforward: interested buyers must submit their applications at the bank’s central office in Lazimpat, Kathmandu. Each application must specify the desired number of shares and the proposed price, along with all necessary documentation.

This process is a reflection of the regulatory framework in place in Nepal, which is designed to ensure transparency and provide existing shareholders with the first right of refusal before shares are offered to the broader market. The sale of promoter shares is a distinct and often complex transaction compared to the trading of ordinary shares on the secondary market. The price of promoter shares is often lower than that of ordinary shares, primarily due to various restrictions on their trading and the smaller pool of eligible buyers, making them less liquid.

Significance of the Share Sale

The sale of a significant block of promoter shares, totaling over 200,000 units, by a development bank like Garima is a noteworthy event in Nepal’s financial sector. It can be interpreted in several ways:

Portfolio Rebalancing: The sale indicates that some of the bank’s existing promoters are offloading their stake. This could be part of a strategic decision to rebalance their investment portfolios, raise capital for other business ventures, or simply exit their position in the bank. Such sales are a normal part of the capital market ecosystem and do not necessarily signal a lack of confidence in the company.

Broadening Ownership: For Garima Development Bank, this offering allows for the transfer of shares that were not taken up by the existing promoter base. This action will serve to broaden the bank’s ownership and diversify its shareholder base. A more diverse shareholder base can contribute to better corporate governance and a more robust market for the bank’s shares in the long run.

Regulatory Compliance: The offering also helps the bank maintain its regulatory compliance regarding the promoter-to-public shareholding ratio. The Nepal Rastra Bank has set specific guidelines on this ratio for all financial institutions. By offering these shares to the public, the bank is ensuring that it meets its regulatory obligations and adheres to a more balanced ownership structure. A more balanced shareholding structure can lead to enhanced market stability and liquidity, which are key objectives for the central bank.

The successful completion of this sale will be a key indicator of investor confidence in Garima Development Bank and the broader financial sector. The ability of the market to absorb these shares efficiently will demonstrate the depth and maturity of Nepal’s capital market. It also serves as a critical mechanism for the market to absorb shares that were not purchased in a closed offering, thereby ensuring efficient capital allocation and preventing market stagnation.

Broader Context of the Capital Market

The Nepal Rastra Bank and other regulatory bodies have been actively encouraging increased public participation in the capital market. The recent push for separate International Securities Identification Numbers (ISINs) for promoter and public shares, which is already in place for banks and financial institutions, is a testament to this commitment. This separation of shares helps to increase transparency and protects retail investors from being misled about the tradability of promoter shares. The current offering by Garima Development Bank aligns with these broader regulatory goals by making a portion of its promoter capital accessible to the general public.

In conclusion, this public offering of promoter shares by Garima Development Bank is a multi-faceted event. It not only provides a channel for existing promoters to divest their holdings but also contributes to the bank’s efforts to diversify its ownership, comply with regulatory requirements, and promote broader public participation in the capital market. The successful outcome of this sale will be a positive sign for the bank’s financial health and for the overall development of Nepal’s capital market.

For More: Garima Bank Promoter Shares