KATHMANDU, Nov 10: The inordinate delay on part of the government to appoint the chairperson of the Securities Board of Nepal (SEBON) has put on hold the issuance of primary shares worth billions of rupees of listed companies.
The records with the SEBON show a total of 34 companies have been waiting for the green signal from the sector’s regulator to float their initial public offerings (IPOs). These companies have sought to issue their IPOs worth more than Rs 27 billion.
Out of those in the pipeline, four companies are looking forward to floating their primary shares at premium prices. Jagadamba Steels Limited has applied with the SEBON to issue its IPOs worth Rs 6.02 billion, the largest of all. The company has sought permission to come up with its primary shares at the premium price of Rs 300 per share.
24 companies preparing to issue IPOs worth Rs 6.5 billion
Maruti Cements and Shaurya Cement Industries are the next in the list, with the companies planning to issue their IPOs of Rs 4.37 billion and Rs 4.22 billion, respectively. While Maruti Cements plans to issue its IPOs at Rs 377 per share, Shaurya Cement is waiting for approval to sell its share at Rs 264.51 per share. Likewise, HAMS Hospital has also planned to issue its IPOs at a premium rate of Rs 288 per share.
SEBON is without a chairman after the tenure of its former Chairman Ramesh Hamal ended on January 6, 2024. Although the government formed a number of committees subsequently, the appointment process could not be finalized due to the lack of consensus at the political level.
Last time, three candidates were shortlisted for the appointment in October. However, the interview and presentation of the work plan were stopped at the last minute.
Mahesh Baral, who currently represents the SEBON Directors from the Ministry of Finance, has been holding the responsibility of the SEBON chairman. However, most of SEBON’s activities, including public expulsions, have been adversely affected.
In the past 10 months, only Reliance Spinning Mills received approval for its initial public offerings on June 26. The company got a go ahead to issue its primary shares worth Rs 948.81 million.
The delay in issuance of IPOs has adversely affected the plans of the listed companies to mobilize capital. “Due to this reason, we have been facing problems in completing project construction within stipulated time,” said an investor in a hydropower company.
