50 real sector companies vie for Nepse listingMore than 50 real sector companies are in line to get listed on the Nepal Stock Exchange (Nepse).
More than 50 real sector companies are in line to get listed on the Nepal Stock Exchange (Nepse).
The country’s capital market is dominated by banks, financial institutions, insurance companies and hydropower companies. There were 208 companies listed on Nepse as of last fiscal year, according to the Securities Board of Nepal (Sebon).
Likewise, 59 private companies are on the way to listing themselves on the stock market. They have already registered themselves as public limited companies at the Office of Company Registrar. They have to wait for a year before they can conduct initial public offerings (IPO), said Sebon Deputy Spokesperson Niranjaya Ghimire.
“Although several of these companies have been making enquiries at Sebon about the procedure for launching IPOs, none of them has so far applied officially,” Ghimire said. The companies that are planning to list themselves on the stock market are related to hydropower, services and trading. The National Banking Institute, Nami College, IME, Chandragiri Hills, Triveni International College, Benco Investment, Lumbini Medical College and Technical Hospital, Gyan Securities and Investment and Arghakhanchi Cement are among those that have been converted into public limited companies.
Similarly, Sanima Hydropower, Nepal Hydro Developer, Unique Hydel Company, Panchthar Power Company, Union Hydropower, Dhaulagiri Kalika Hydro and Bhairab Kunda Hydropower are among the companies from the energy sector that have registered themselves as public limited companies.
According to Sebon, real sector companies became interested in going public after stocks registration and issuance regulations were revised last year.
As per the new rules, companies are required to offer only 10 percent of their shares to the general public, down from 30 percent. Moreover, the budget statement for fiscal 2016-17 said that companies wishing to go public would get a 15 percent income tax rebate.
Sebon Chairman Rewat Bahadur Karki said the provision allowing companies to issue shares at a premium also helped to attract real sector companies into the capital market.
Giving an instance of the developed countries, Karki said there was a need to include real sector companies for the long-term sustainability of the capital market.
Karki said effective regulation was needed to minimise challenges while bringing a large number of real sector companies into the capital market. He further said the government should create a mandatory provision for bringing more real sector companies into the capital market. “It should be made compulsory for companies with an annual turnover of more than Rs1 billion to go public,” he said.