KATHMANDU: Companies with paid-up capital of less than 25 million Nepali rupees are now considered SME companies, according to the Securities Board of Nepal (SEBON).
When these companies issue an IPO, a minimum of 250 shares may be applied for. Typically, shares have a 100 rupee face value.
The preliminary draft of the regulations governing the issuance and trading of securities by small and medium-sized businesses was published on Thursday, and this allowed the board to determine the paid-up capital.
The board has stated that it will consider opinions and suggestions before finalizing the regulation.
The exchange has been given authority by the board to manage the main board and SME platform for the purpose of managing SME company business.
Which states that businesses can still access the secondary market in the current environment.
Such businesses are required to offer their stock for sale (IPO) with less than 30% and no more than 49% of their issued capital. In order to raise capital, they can also issue rights.
The Board has also allowed for premium-priced securities to be publicly issued. Financial statements show that the issue price may be set at a maximum of twice the share’s net worth.
Whose net worth per share should exceed the company’s paid-up capital per share. A credit rating grade of average or higher is also required.
TMS will be used for stock trading in companies. If a listed corporate entity so chooses, it may also voluntarily delist securities.
Five years must pass before selling a company’s common shares. The regulations stipulate that securities organized organizations cannot sell shares before a period of five years has passed since the date of the primary public issue for the general public. The general public will be able to sell.
However, after the one-year period has passed, private equity, venture capital, hedge funds, or other specialized types of funds can sell their ownership.