Price history of Agricultural Development Bank (ADBL)

July 5, 2019 | Investopaper

Agricultural Development Bank Ltd. (ADBL)  is one of the 28 commercial banks of Nepal. It was established in 1968. The main objective of the bank is to provide institutional credit for enhancing the production and productivity of the agricultural sector in the country. It is an autonomous organization largely owned by the Government of Nepal. Here, we will analyze the price history of the Agricultural Development Bank (ADBL).

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The bank decided to go public in 2010. So, the company floated one of the biggest IPOs in the history of Nepal. The company issued 9.6 million unit public shares worth Rs. 960 million in April 2010. The company started trading in the Nepalese stock market from the same year under the symbol ADBL.

It is important to know the price history of the stock in a different market situation. This helps to understand the different aspect of a company’s stock. For instance, if you know the price performance of stocks at a  bull, bear and stagnant market period, then it helps you to know the risk associated with the stock.

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Price History of ADBL

The graph alongside shows the price history of ADBL in the Nepalese stock market since 2013. It shows the low price, high price and average price of the company for the last six years. ADBL recorded the highest price of Rs. 1082 during the bullish market in 2016. The company share price increased from Rs. 200 range to the maximum point during the bull run. Nepse index rose to 1881 points from 581 points during a 2013-2016 bull period. Likewise, Nepse declined to 1100 once the bear market followed. As a result, the price of the company gradually declined to Rs. 300 range.

price history of adbl

As shown in the graph, the price of ADBL surged in 2016 and then declined throughout. This is mainly because the company has continuously increased its paid-up capital through bonus share distribution. Also, the company issued 50 percent right share to its existing shareholders in 2016.  Lately, the company distributed 6 percent bonus and 11 percent cash from the profit of fiscal year 2074/75. As of now, the paid up capital of the company stands at Rs. 9.02 Arab.

This significant increase in paid-up capital ( by more than 2.5 times) is one of the causes of the decline in stock price. The investors who bought the shares of ADBL at the highest market price of Rs. 1082 in 2016 will be breakeven at the price of Rs. 480. This amount is calculated by adjusting the bonus and cash dividends received by the shareholders of the company.

Also, the major market crash starting from 2017 led the stock price to slip below Rs.350 in 2019. But the good financial performance of the company has overturned the deficit of the market crash. The net profit of the company until the third quarter of the fiscal year 2075/76 stands at Rs. 2.21 Arab.

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ADBL Stock Sensitivity relative to Nepse index

The price of ADBL at the start of 2013 was Rs. 241  and rallied to Rs. 1082 in July 2016. So, the market price of ADBL increased by more than 450 percent. During this period, the Nepse index also rose by more than 220 percent. Similarly, when Nepse declined by more than 32 percent from the peak, ADBL market value fell by only 15 percent. This shows that the company has shown good resistance to the market decline.

Return to IPO investors

So, how much return have the IPO investors got by investing in Agricultural Bank public offerings? The stock is trading at the rate above Rs.400 in the Nepalese share market which is 4 times more than the IPO subscription price of Rs. 100. Also, after the IPO issue, investors shareholdings has doubled by more than 2.5 times. This means the  IPO investors share value has increased by more than 10 (2.5 *4) times excluding cash dividends in the 8 year period.

The last trading price of ADBL as of July 03, 2019 stands at Rs. 414.

To know about the history of Nepse, click here.




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One thought on “Price history of Agricultural Development Bank (ADBL)

  • November 3, 2021 at 6:08 pm

    How can i transfer my ADBL share in my BOID?


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