CITY: Fundamental Analysis and Behavior After Lock-in Period Expiry

City Hotel Limited is a company with the paid-up capital of Rs. 3,01,32,00,000 and is listed under NEPSE as ‘CITY’. The company published a notice regarding the expiration of the lock-in period of its promoters and employees shares on 19^th May 2026. CITY now has 30,132,000 units of shares listed on the NEPSE and out of those, the promoters held 27,118,800 units and the company's employees held 1,20,528 units. These shares that had been subjected to a lock-in period since the IPO allotment three years ago can now be traded in the secondary market. If we look at the market data today, we can see that around 1,28,00,000 shares have already been traded since the expiry of lock-in period which is nearly 42.5% of the total tradable share.

The period following the lock-in expiry was accompanied by a notable increase in trading activity. While the lock-in event attracted significant market attention, the company's underlying financial performance remains an important factor in evaluating CITY. The company has continued to report net losses in its quarterly financial statements, although the magnitude of the loss has declined over the past three fiscal years.

Let’s look at the past three years of important fundamental indicators of CITY:

We can see from the above table that the share capital of CITY increased from Rs. 1,67,40,00,000 in FY 2081/82 to Rs. 3,01,32,00,000 in FY 2082/83. It is because the company issued 80% of right shares, i.e., 1,33,92,000 (1:0.8) units of right shares, to its existing shareholders opening on 28 September 2025 and closing on 12 October 2025.

The table shows that CITY remained loss-making throughout the three fiscal years, with net losses of approximately Rs. 20.47 crore, Rs. 19.90 crore, and Rs. 17.31 crore in FY 2080/81, FY 2081/82, and FY 2082/83, respectively. Although the company continued to report losses, the loss narrowed in FY 2082/83 compared with the previous two years. A similar pattern can be observed in EPS, which improved from -Rs. 12.24 in FY 2080/81 to -Rs. 5.74 in FY 2082/83. Since the company continued to report negative earnings, its EPS remained negative throughout the period. PBV ratio shows decline and net worth per share is also seen fluctuating.