List of Upcoming Initial Public Offerings (IPO) in Nepal - ToughNickel - Money
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List of Upcoming Initial Public Offerings (IPO) in Nepal

Roberto worked as a research analyst for a stock brokerage company and has been writing about the Nepali stock market since 2013.

Over Rs 10 Billion Worth of IPOs Are in The Pipeline in Nepali Stock Market

Upper Tamakoshi Hydropower Limited floated over Rs 2.63 billion worth of IPO shares last year, the largest IPO in the history of Nepal ever. Nepal Reinsurance Company followed this year with a massive Rs 1.60 Billion IPO. In FY2020-21, Nepali stock market will witness the largest IPO yet—Rs 8 Billion worth initial shares of Nepal Infrastructure Bank.

Dozens other companies are in the review process for floating their initial public shares to the general public, the details of which can be found below.

upcoming-initial-public-offerings-ipo-in-nepal

Since investing in IPOs in Nepal (i.e. primary market) is the safest stock investment option, investment in IPOs is a relatively quicker way to get more returns.

Why Is Investing in IPOs in Nepal Considered Safe and Quick?

When IPO shares are allotted and listed in Nepal Stock Exchange (NEPSE), they can be freely traded. As per the provision, the range of the first transaction in NEPSE is within three times the company's book value. For example: if a company's book value per share is Rs 70, it can be traded within Rs 70 to Rs 210 range for the first transaction. If we analyze the history, all stocks begin their first transaction at the "three times" mark. So, one can easily double or triple their money as the IPO shares are sold for Rs 100 in Nepal.

Since the initiation of C-ASBA procedure in applying IPO, the shares will be allotted within 10 days and listed within one month. This will make it easier for investors to double/triple/quadruple their initial investment with enough knowledge in a very small time period. Further, at least 10 shares are guaranteed for each applicant in IPO. Lottery system will only be used if there are not enough shares to allot every applicant a minimum of 10 shares.

RELATED: If you had invested Rs 1 lakh in Nepal stock market 5 years ago, this is how much you would have made.

IPOs Coming in Nepal 2020

These public issues have already received approval from the Securities Board of Nepal, or are in the application pipeline in SEBON.

General Insurance Company Nepal Limited

One of the newest non-life insurance companies of Nepal, General Insurance Company, is floating its IPO to the public. It will float a total of 3 million units at Rs 100 each.

  • Issue Date: September 27 - 30, 2020
  • Issue Size: 3 million units @ Rs 100 each (Rs 300 Million)
  • Issue Manager: NIBL Ace Capital Limited
  • How to Apply: Applications can be made online from MeroShare or via visiting any of the C-ASBA approved Banks and Financial Institutions.
  • Credit Rating: CARE-NP BB+(Is) (Moderate Risk)

Sanima General Insurance Company Limited

Sanima General Insurance has finally received the ultimate approval from the Securities Board to issue its IPO.

Currently, its paid-up capital stands at Rs 700 million. As per the Insurance Board's directive and regulatory requirement for non-life insurance companies to increase their paid-up capital to Rs 1 Billion, it is raising the additional Rs 300 Million by issuing primary shares to the public. After the issuance of the 30 million units IPO shares, its paid-up capital will reach Rs 1 Billion.

How lucky have you been so far to be allotted shares of microfinance companies in IPO?

Upcoming IPOs in Nepal

Upcoming IPOs with ICRA/CARE Ratings

CompanySectorAmountCredit Rating

Mountain Energy Nepal Limited

Hydropower

1.968 million units for Rs 196.80 Million (only for project-affected locals of Myagdi and Nuwakot districts)

ICRA-NP IPO Grade 4 [Below Average]

NCell Axiata Limited

Telecommunications Company (NEPSE Sector: Others)

-

-

Citizen Life Insurance Company Limited

Life Insurance

7.50 million units for Rs 750 Million

-

United IDI Mardi and RB Hydropower Limited

Hydropower

0.42 million units for Rs 42 Million

CARE-NP IPO Grade 4 [Below Average]

Dish Media Network Limited (DishHome)

Others

2.38 million units for Rs 238.59 Million

-

Nepal Infrastructure Bank Limited (NIFRA)

Banking

80 million units for Rs 8 Billion

-

NRN Infrastructure and Development Limited

A company promoted by a Non-Resident Nepalese (NRN) group with primary objective to invest in infrastructures in Nepal has received approval from SEBON to float its IPO worth Rs 339 million. However, the company has received a below-average credit rating from CARE Ratings Nepal.

  • Issue Date: July 31 - Aug 3, 2020
  • Issue Size: 3.39 million units @ Rs 100 per share
  • Issue Manager: Sanima Capital
  • Result and Allotment: On August 11, 2020, the allotment was conducted. Exactly 3,20,614 applicants were allotted each 10 units shares. Rest of the shares were allotted to mutual funds and staffs of the company.

Ajod Insurance Company Limited

Ajod Insurance is a non-life insurance company with an issued capital of Rs 1 Billion. After this IPO, its paid-up capital has reached Rs 1 Billion from Rs 700 Million.

The company is floated a total of 3 million units each valued at Rs 100 per share for a total of Rs 300 Million. After the IPO, general public now hold 30% of the shares while its promoters hold the rest 70%.

The issue was managed by NIBL Capital Markets Limited. Over 540,000 applicants applied for the IPO but only 273,000 were able to get a hold of 10 units shares each.

Sadhana Laghubitta Microfinance

  • Issue Date: July 5 - July 8, 2020
  • Issue Manager: Global IME Capital Limited
  • Minimum units to apply: 10
  • Maximum units to apply: 1,000

NIC Asia Laghubitta (Microfinance)

NIC Asia Laghubitta recently floated IPO worth Rs 475.50 million. This amounts to 32.13% of its issued capital. The microfinance company issued a total of 4.755 million unit shares at the paid-up value of Rs 100 per share.

Sanima Capital has been appointed as the issue manager, and it is set to allot the IPO shares on July 4, 2020.

Nepal Re-insurance Company Limited

Nepal Re-insurance Co. Ltd. (NEPSE: NRICL) is issuing a whopping 16 million units ordinary shares to the general public from March 17th to March 20th, 2020. Each unit of share is priced at Rs 100.

The offering was graded IPO Grade 2 by ICRA Nepal, which is the second-best credit rating received by any company in Nepal. Previously, Standard Chartered Bank Nepal had received IPO Grade 2+ for its Further Public Offering (FPO) in 2017. Grade 2 signifies above-average rating.

NRICL posted a net profit after tax of Rs 1.17 billion at the end of FY 2019-20 as per its unaudited report. This amounts to an Earnings Per Share of Rs 14.04 or 14.04%.

Sparsha Microfinance

With a capital of Rs 56 million, this microfinance company is planning to issue 269,630 units IPO shares to the general public. The shares will be issued at paid-up value of Rs 100. The company will issue shares under the issue management of Sanima Capital from March 10th to March 13th, 2019. If the issue goes under-subscribed during the 4 working days, it will accept applications till April 8th, 2019.

The IPO is being issued at par value of Rs 100 per unit.

Sparsha Laghubitta Bittiya Sanstha has posted a net profit after tax of only Rs 0.1 million until the end of 4th quarter of running fiscal year 2017-18 and has a book value of Rs 100 per share. Post IPO, its paid-up capital will reach Rs 82.96 million and its shares will be first traded in the range of Rs 100 to Rs 300.

Mountain Hydro Nepal Limited

Mountain Hydro Nepal Limited, established as a public company in 2016, is developing a 21.6 MW Lower Hewa Khola Hydropower plant in Panchthar district of Nepal. The company published an offer letter to issue 1,816,110 shares to the general public as its IPO. The IPO received applications from investors from March 7th, 2019 to March 13th. 2019.

The hydro power company raised a total of Rs 181.61 million through this IPO, which the company will use to pay off its bridge gap loans.

There are more than 20 hydropower companies in Nepal that are also listed in Nepal Stock Exchange. This is the dam-site of Chilime Hydropower, which trades in NEPSE using the ticker symbol CHCL.

There are more than 20 hydropower companies in Nepal that are also listed in Nepal Stock Exchange. This is the dam-site of Chilime Hydropower, which trades in NEPSE using the ticker symbol CHCL.

Greenlife Hydropower Limited (for project-affected locals)

With a plan to raise Rs 180 million from project-affected people of Dolakha district, Greenlife Hydropower Limited issued 18,00,000 shares in March 2019. The issue could only be subscribed by the residents of Dolakha district.

How to Apply for an IPO

When any IPO is approved by the Securities Board, the issue manager (merchant banker appointed to manage the issue of initial public offering shares on behalf of the company) publishes the timeline of the issue in a national daily newspaper. Typically, the IPO application collection duration lasts for 4 days.

Interested applicants must apply for a minimum of 50 shares (i.e. Rs 5,000 at Rs 100 per stock). By visiting any of the ASBA-approved banks in Nepal, one can apply for the IPO. Apart from IPOs, applicants can also apply for Further Public Offerings (FPO) and initial offering of mutual funds in Nepal through ASBA-approved banks and financial institutions.

Online Application System in IPO in Nepal

Applying for an issue can also be made online via a service called MeroShare. MeroShare is a product of CDS & Clearing Limited (CDSC), NEPSE's subsidiary that handles clearing and settlement of shares after they are traded in the secondary market.

The funds are held in your bank account and the money is deducted only if there are shares allotted to you.

IPO Application Overview (Mero Share)

IPO Application Overview (Mero Share)

Upcoming IPOs in Nepal (2020) - Microfinance Companies

S.N.CompanyNo. of IPO sharesTotal IPO Amount (Rs.)IPO Price per Share (Rs.)

1

Samaj Laghubitta Bittiya Sanstha Limited

200,000

20,000,000

100

2

Gurans Microfinance Bittiya Sanstha Limited

250,000

25,000,000

100

3

Janasewi Laghubitta Bittiya Sanstha Limited

420,000

42,000,000

100

4

Ganapati Laghubitta Bittiya Sanstha Limited

335,000

33,500,000

100

Recent IPOs in Nepal and Their Market Prices

Taking into consideration as Initial Investment amount = Rs 100 and Triple = Rs 300 per share

CompanyLast date of IPO issueDate when the market price hit triple the investment priceTime

Nadep Microfinance

June 27, 2018

August 30, 2018

2 months

Upper Tamakoshi Hydropower Limited

November 5, 2018

January 17, 2019

2 months

Nepal Sewa Laghubitta Bittiya Sanstha Limited

April 29, 2018

June 14, 2018

1.5 months

Aarambha Microfinance Bittiya Sanstha Limited

March 5, 2018

April 12, 2018

1 month

Radhi Bidyut Company Limited

December 21, 2017

June 17, 2018

6 months

Support Microfinance Bittiya Sanstha Limited

October 9, 2017

April 3, 2018

6 months

Nepal Hydro Developer Limited

August 16, 2017

November 15, 2017

3 months

Himalayan Power Partner Limited

June 19, 2017

August 21, 2017

2 months

United Modi Hydropower Limited

March 6, 2017

May 30, 2017

2.5 months

Samata Microfinance Bittiya Sanstha Limited

January 6, 2017

June 19, 2017

6.5 months

Chhyangdi Hydropower Limited

June 1, 2017

August 3, 2017

2 months

Swadeshi Laghubitta Bittiya Sanstha Limited

April 11, 2017

August 10, 2017

4 months

Synergy Power Development Limited

December 28, 2016

May 21, 2017

5 months

Forward Community Microfinance Bittiya Sanstha Limited

January 25, 2017

May 21, 2017

5 months

Arun Kabeli Power Limited

October 28, 2016

April 16, 2017

5.5 months

Dibyashwari Hydropower Limited

June 30, 2016

February 14, 2017

8 months

Khanikhola Hydropower Company Limited

June 1, 2016

January 12, 2017

6 months

Mero Microfinance Bittiya Sanstha Limited

March 24, 2016

September 5, 2017

5.5 months

RSDC Laghubitta Bittiya Sanstha Limited

August 24, 2016

February 8, 2017

5.5 months

Average Time it takes to triple an investment in IPO = 4.1 months

(as of February 2020)

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2017 Roberto Eldrum

Comments

bishnuprasad bhatyarai on August 27, 2020:

How to get loss right share

sagar on May 31, 2019:

how to apply for promotor share

i on August 21, 2018:

Ipo reading also

sk111111 on October 08, 2017:

how to apply for promoter shares???

mahesh on August 09, 2017:

would it possible to provede ipo grading also