The IPO issuance of 43 hydropower companies will proceed only after the Securities Registration and Issuance Regulations are amended.

The IPO issuance, which was halted following the directive of the Public Accounts Committee (PAC) under the House of Representatives (HoR), will not proceed further at this time, according to concerned government officials.

The PAC, on December 28, 2023, made a decision and sent a letter to the Securities Board of Nepal (SEBON), effectively halting the IPOs of 43 projects that had applied to the board.

SEBON had announced that only companies with a real net worth of more than 90 should be included in the IPO, mainly at a premium price and through the book-building method. Similarly, the PAC has directed SEBON to ensure that one-third of the shares cannot be sold until the debt is repaid.

So far, 91 public companies have 6 million shares worth about Rs 42 billion in public ownership. Additionally, most of the projects under construction are in the process of issuing IPOs. However, the work has been halted due to the direction of the PAC.

SEBON has formed a committee to amend the Securities Registration and Issuance Regulations to implement the directives given by the PAC and the Finance Committee under the HoR.

The parliamentary committees have directed SEBON to conduct the IPO issuance in such a way that only companies with a net worth of more than 90 can issue primary shares. As a result, SEBON has not yet been able to make any decisions regarding the IPO.

Although SEBON has directed companies with a net worth of less than 90 to not issue primary shares, there is no such provision in the board's Securities Registration and Issuance Regulations. The board is preparing to amend the regulations to implement the committee’s directives.

The work will proceed for the approval of IPOs of companies with a net worth of more than 90 only after SEBON amends the regulations. Of the 267 companies listed on the stock market, 92 are hydropower projects, while 43 companies in the pipeline for IPO are in the hydropower sector.