After five years of floating Initial Public Offering (IPO) in the market, the company, Sherza Ventures was criticized for floating the IPO in the social media.
It is a first of its kind new generation company floating IPO in the market. Sherza Ventures Limited floated IPO raised an amount of Nu 247mn within a month in August. The IPO is open till September 27 this year.
The company floated 19mn equity shares at Nu 13 per share.
The last IPO floated was in 2014 by GIC-Bhutan Reinsurance Co.Ltd.
However, there has been a spate of comments on social media attacking the company.
According to posts on social media Sherza Ventures seems like “it was started by someone who has a huge business idea but does not want to risk own money but rather wants to experiment on public money.”
The Chief Executive Officer (CEO) of Royal Security Exchange of Bhutan (RSEB), Dorji Phuntsho said that Sherza Ventures is an approved security under the companies Act. “They have fulfilled all the criteria and have approved to be a listed company.”
The CEO also mentioned that before approval for IPO they ensure that the company is fit for listing.
“When it comes to risk and reward you are investing as equity and not a debt instrument. In equity you are the owner. Investors should invest after carrying out all due diligence,” said the CEO.
The CEO also said that for RSEB, Sherza has ventured out right on time to capture the potential of capital market: they want to be model based Fast-Moving Consumer Goods (FMCG) company.
“Yes, there is risk but at the same time we cannot outweigh the rewards,” said the CEO.
RSEB also said that it is listed securities; if it becomes successful it will be listed on the exchange and in the secondary market naturally the shares will be tradable. The prizing will depend on the performance of the company.
With the stock market picking up over the years and considering the smallest stock markets in the world many people feel that there is unnecessary criticism and negative publicity which could will have negative implication on IPO.
On the criticism on the social media, the CEO responded that there will be skeptics but they have to mindful that if the due diligence has been done under the act and approved. “Nobody is forcing to put in money.”
If there are concerns they should complain to the authorities, the CEO added.
Once the company is listed they will be governed by listing rules and they have code of governance with a board of directors. “Sherza is a public and organized company. The board will be accountable to the shareholders and transparent to the shareholders.They are a legitimate company,” said the CEO.
The CEO of Sherza Ventures Jurmay Chophel said that any business will involve risks. The promoters will be more concerned about the risks and viability because they have invested their shares as well in the company, he said.
“Our effort is to take this business forward and achieve the vision of the company within the time frame predicted,” said the CEO.
As of Friday, the amount invested in Sherza was Nu 30.27mn and volume subscribed was 2.3mn shares.
Listing a company requires substantial paperworks and is financially expensive as well. Today, there are 21 companies listed with the RSEB.
Dechen Dolkar from Thimphu