Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Nepal Securities Board (SEBON) has sent back the Initial Public Offering (IPO) proposals of more than 24 companies, citing a failure to meet the minimum net worth requirement of Rs. 90 per share. SEBON has instructed 14 of these companies, including six hydropower firms, to revise and resubmit their applications, causing a stir in Nepal’s capital market.
The affected companies include Prabhu Helicopter, Kantipur Television, Accord Pharma, Annapurna Cable Car, Sanima Hydropower, Richek Hydropower, Laughing Buddha, Puwa Khola Hydropower, and Beni Hydropower.
SEBON’s decision stems from a directive issued by the parliamentary Accounts Committee in Jestha 2081 (May 2024), which prohibited companies with a net worth below Rs. 90 per share from issuing IPOs. This move aims to protect investors by ensuring financial stability in companies seeking public funds.
However, the decision has sparked controversy. Several companies have criticized SEBON, arguing that the net worth requirement lacks a clear legal foundation. Posts on X reflect similar sentiments, with users questioning the sudden enforcement of the rule and its impact on Nepal’s growing IPO market. One user remarked, “SEBON’s net worth rule feels arbitrary—how will small companies raise capital now?”
The rejection of these proposals could delay fundraising plans for the affected companies, particularly in the hydropower sector, which has been a key driver of Nepal’s IPO market. Analysts suggest that SEBON’s stricter oversight aims to enhance market transparency but may discourage smaller firms from entering the public market. As Nepal’s capital market evolves, SEBON’s balancing act between investor protection and market growth remains under scrutiny.
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