A total of 80 companies have submitted applications to the Nepal Securities Board (SEBON) for Initial Public Offerings (IPOs). This surge in applications is attributed to a halt in granting new approvals over the past year. These companies are preparing to issue IPOs worth NPR 49.48 billion. While the applications are already with SEBON, only one company has received approval thus far due to the absence of a board chairperson. Recently, SEBON approved Guardian Microinsurance Company to proceed with its IPO.

Legal Framework and Recent Developments

Companies receive IPO issuance permission from SEBON and are required by law to complete the process within two months. Two weeks ago, the government appointed Santosh Narayan Shrestha as the new chairperson of SEBON. Following his appointment, SEBON’s spokesperson Niranjaya Ghimire stated that the relevant departments have been directed to expedite pending applications. “With instructions in place, the IPO and other issuance processes will gradually move forward,” Ghimire confirmed.

IPOs and Rights Share Approvals

Over the past year, five companies have obtained rights share issuance approvals, while one company received approval for an IPO. Currently, IPO applications worth NPR 49.48 billion are under review, involving 34.19 million shares across 80 companies from various sectors.

Sector-wise IPO Applications

1. Hydropower Sector

The hydropower sector leads with 40 companies submitting IPO applications for shares worth NPR 16.41 billion, totaling 163.6 million shares. Notable companies include Sanima Hydropower, Himstar Energy, Bhujung Hydropower, Darmakhola Hydro Energy, Sanvi Energy, and Beni Hydropower.

2. Hotel and Tourism Sector

Seven companies in this sector aim to issue IPOs worth NPR 3.31 billion, covering 35.36 million shares. Key players include Apex Hospitality, Hotel Forest Inn, Arcade Holdings, Annapurna Cable Car, Bandipur Cable Car & Tourism, Akama Hotel, and Thamel Plaza Hotel & Suites.

3. Investment Companies

Three investment firms, including Varun Investment, Seed Energy, and Shivam Holdings, have proposed IPOs amounting to NPR 2.84 billion for 15.67 million shares.

4. Manufacturing and Processing Sector

Fifteen companies in this category have IPO plans worth NPR 22.68 billion, encompassing 91.67 million shares. Applications include Accord Pharmaceuticals, SY Panel Nepal, Surya Cement Industries, Maruti Cements, Smart Doors, Palpa Cement Industries, and Om Megashree Pharmaceuticals.

5. Microfinance and Microinsurance

Microfinance institution Swastik Microfinance has applied for IPO issuance. In microinsurance, Crest Microlife Insurance, Nepal Micro Insurance Company, Protective Micro Insurance, and Star Micro Insurance have also submitted applications.

6. Other Sectors

Ten companies from diverse sectors, including Trade Tower, Kantipur Television Network, Dish Media Network, IME, HAMS Hospital, Peer Energy, Nepal Broadcasting Channel, Kailash Helicopter Service, Chhaya Devi Complex, and Business Interest Group of Industries, have filed IPO applications.

Secondary Share Issuance

Additionally, six companies that have already listed IPOs are seeking approval for Further Public Offerings (FPOs) to raise additional capital.

Stock Market Statistics

As of October 2024, the Nepal Stock Exchange (NEPSE) lists 267 companies, an increase from 263 in October 2023. Among these, 129 are banks, financial institutions, and insurance companies. Other sectors include hydropower (91 companies), manufacturing and processing (22), hotels (7), investment firms (7), trading companies (4), and miscellaneous (7).

Market Capitalization Breakdown

Banks, financial institutions, and insurance companies dominate the stock market with a 59.2% share of market capitalization. Hydropower companies account for 14.7%, investment companies 7.9%, manufacturing and processing 5.6%, hotels 2.8%, trading companies 0.5%, and other sectors 9.3%.

This increasing interest in IPOs underscores Nepal’s growing capital market, yet regulatory delays and procedural inefficiencies remain significant challenges.