The government announces a plan to increase public share in Nepal Telecom to 25 percent. Speaking on the company’s 21st anniversary, the program’s chief guest Prithvi Subba Gurung shared that it plans to increase the public’s stake by three-fold from 8.47 percent at present. According to the minister, the move would be one of the key steps in restructuring the company.
The minister said that the company cannot function properly under its current situation and sees higher public shares as key. As of now, the government is the company’s largest shareholder at 91.52 percent (worth Rs 16.47 billion). The public holds only 8.47 percent (worth Rs 1.52 billion) of shares in the company’s leading telecom giant. It has a paid-up capital of Rs 18 billion.
If this comes true, the company will generate large sums from the public which it can use to improve services. It will also bring the public closer to the government business and improve trust. And the government looks keener than ever. Minister Gurung said that the company’s work efficiency requires some changes, and it can’t make any delay. He also said that the committee that studies how to improve the company’s efficiency recommended the same (increasing public share).
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Nepal Telecom to float 25 percent shares for the public three-fold of current allocation
If Nepal Telecom allocates a 25 percent share to the public, it will be three times more than the current allocation. At present, the public owns 8.47 percent of the shares in the company.
But it’s not the first time the government announced plans to increase public equity in the company. In the FY 2078/79 budget speech, the government shared a plan to increase public share in the company to 22 percent. But it didn’t happen. Also, floating 25 percent shares to the public end rumors of Nepal Telecom entering a strategic partnership with an entity with 30% equity stocks.
It could also be that to be eligible to apply for Ntc shares, you will need to be a customer of the company. NTC customers will be eligible to apply for a share in NTC. You must be either a SIM card user, Landline, or ADSL or FTTH NT Fiber subscriber. If you are neither of them, the easiest workaround would be, getting an NTC SIM soon.
Recommended Read: Get Stock market Info on Ntc, Ncell Mobile via SMS
What Could Be The Price Of Each Share Unit?
Currently, NTC has only 66 lakhs and 60 thousand active shares and its price remains high. Last time NTC’s share was traded for NRs.901.10.
However, after the disinvestment, the number of shares will amount to over 3.44 crore units. This may contribute to a lower price for each unit of share. But the telco will undergo some work before the price is finalized for its share.
NTC will first conduct its DDA and conclude on its minimum share price per unit. It will be followed by an auction and the bid for the highest amount will determine the final price of NTC’s price per unit of share.
The price will also boil down to its demand among the investors. The high demands will likely inflate the price or the way round, a traditional inverse relationship between the demand and supply ratio.
Do Read: Nepal Telecom 5G Trial
Will NTC Share Bring Benefits?
As we know, Nepal Telecom is the largest telecom operator in Nepal with a 51 percent market share in telecom and has over 1.31 crore 4G users. Therefore, investing in it is certainly a matter of interest among the public.
Apart from being a telecom operator, it is also an Internet Service Provider. Nepal Telecom has heavily invested in optical fiber providing next-gen fiber internet and also replacing the ADSL service with it.
As for economics, NTC remains profitable despite seeing financial lows in recent fiscal years. The company earned Rs 6.61 billion in profit in FY 2080/81. Being the lead in Nepal’s telecom sector and with the government’s shares, it’s likely to stay strong in financial terms. Check out more: Ntc financial report FY 2080/81
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As NTC is backed by the state, it has no shortage of means and resources to sustain and compete with other telecom giants. Therefore, it will remain stable due to its ever-expanding network and services. For any potential investor, NTC would be a strong entry into their portfolio.
By inviting wider public participation, the government seeks to reduce its ownership with 91.50% of shares. We can expect the government to make efforts to make this happen in FY 2081/82. We will continue to update the information as they emerge.
Check out: Nepal Telecom launches VoLTE with Voice, Video calls.
Finally, the largest telecom operator NTC has made its large portion of shares available for the public. How excited are you about this announcement? Will you be applying for the Ntc shares? You can drop your opinion in the comments section below.
