SEBON Preparing to approve Pipeline IPO that has been stopped for five months

SEBON Preparing to approve Pipeline IPO
SEBON Preparing to approve Pipeline IPO

The Securities Board Of Nepal (नेपाल धितोपत्र बोर्ड) plans to approve the public offering (IPO), which has been on hold for five months. As the complaints increased, Finance Minister Barsha Man Pun instructed the Acting Chairman and Executive Director of SEBON Navraj Adhikari to approve the pending companies in the pipeline status (final stage) to release the IPOs.

Board मा अहिले करिब २८ अर्ब मुल्यबराबरको Share निष्कासन गर्न Company हरु  pipeline status मा छन् । 

नेपाल धितोपत्र बोर्ड stopped IPO approvals before the former chairman Ramesh Kumar Hamal’s term (औपचारिका कार्यकाल) ended on December 22. An official (अधिकारी) from the Securities Board said the Acting Chairman received instructions from the Ministry of Finance and permission will now be granted after the Board of Directors (सञ्चालक समिति) meeting. The official stated, “The Board of Directors can still decide and grant permission to a company that has been waiting for a long time to adjust the fixed price, even though it’s late”.

In October 2023 (कार्तिक महिना), because many companies were issuing IPOs, the secondary market felt pressure, so the main investors (लगानीकर्ता) asked to stop issuing IPOs. In response, the board halted IPO issuance. However, IPO issuance remained suspended for five months because the board remained without a board chairman.

There are many companies in the first phase awaiting approval from the Securities Board which includes 95.6 million shares (९ करोड ५६ लाख कित्ता सेयर) worth 16.45 billion (१६ अर्ब ४५ करोड).

Out of there are four productive groups (Manufacturing and processing). Seven hydropower companies, five from other categories, one hotel and tourism company, one microfinance company, and one from the investment category are preparing for IPOs.

S.N Company Sector No. of Companies
1 Manufacturing and processing (उत्पादन मुलका) 4
2 Investment  1
3 Hydro 7
4 Other Sector 5
5 Hotels and Tourism 1
6 Microfinance 1

Furthermore, the board is preparing to issue ७ करोड ४६ लाख ४७ हजार कित्ता shares worth Rs. ११ अर्ब ४७ करोड ७८ लाख which is at the final stage of distribution. At this stage, Jagdamba Steel Company under the manufacturing group is preparing to issue at a premium price. There are 10 hydropower group companies, four are from other groups, and one company is from the hotel and tourism group.

S.N Company Sector No. of Companies
1 Manufacturing and processing (उत्पादन मुलक)  1
2 Hydro 10
3 Other Sector 4
4 Hotels and Tourism 1


Why IPOs is not coming in Nepal?

In October 2023 (कार्तिक महिना), due to the increased number of IPO issuing corporations, the secondary market faced pressure, so the main investors (लगानीकर्ता) requested to freeze the IPO issue, and the board stopped the IPO issuance. However, IPO issuance was stopped for five months since the board remained without a chairman.

Which IPO is coming soon in Nepal?

There are many upcoming companies launching IPOs soon in Nepal some of them are in the first phase of review and many are in their final stage of approval.

Is buying an IPO is good or bad?

Buying an IPO is good because when a company first sells its shares, the price is usually low, and the value of those shares will likely go up soon, giving you a chance to make more money with a smaller investment.

Why is IPO expensive?

The price of an IPO is usually lower than you would pay for the same stock later in the secondary market. However, the IPO prices of different companies can vary due to factors like underwriting fees, how the price is set, market demand, and limited availability.