List of Upcoming Initial Public Offerings (IPO) in Nepal

Updated on August 7, 2020
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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.

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.

Upcoming IPOs in Nepal

Company
Sector
Amount
Credit Rating
Liberty Energy Company Limited
Hydropower
1.50 million units for Rs 150 Million (only for project-affected locals of Lamjung district)
ICRA-NP IPO Grade 4 [Below Average]
Reliance Life Insurance Limited
Life Insurance
6.30 million units for Rs 630 Million
ICRA-NP IPO Grade 4 [Below Average]
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]
NRN Infrastructure and Development Limited
Investment Company (NEPSE Sector: Others)
3.39 million Units for Rs 339 Million
CARE-NP IPO Grade 4 [Below Average]
Laxmi Unnati Kosh (Laxmi Capital Market Ltd.)
Mutual Fund
80 million units for Rs 800 Million
[ICRANP] AMC Quality 3 (AMC 3); Reaffirmed for Laxmi Capital Market on February, 2020
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
-
Upcoming IPOs with ICRA/CARE Ratings

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
  • How To Apply: Applications can be made online through MeroShare, or by visiting any C-ASBA approved Banks and Financial Institutions

Reliance Life Insurance Limited

One of the 10 new life insurance companies approved by the Insurance Board in FY2016-17, Reliance Life Insurance has finally received the ultimate approval from the Securities Board to issue its IPO.

Currently, its paid-up capital stands at Rs 1.47 Billion. After the issuance of the massive 63 million units IPO shares, its paid-up capital will reach Rs 2.10 Billion. ICRA Nepal has graded the issue with [ICRA-NP] IPO Grade 4 rating, which means that the company has below-average fundamentals. Until the end of the 3rd quarter of the last financial year 2019-20, the life insurance company posted Rs 61.81 Million in net profits over Rs 797.19 Million in net premium earned. This amounts to an annualized Earnings Per Share (EPS) of Rs 4.20 (4.20%).

Major chunk of the earnings have been transferred to its Insurance Fund which has grown to Rs 869.86 Million in the period. The company can distribute the fund as dividend pending actuarial valuation and approval from the regulator.

Some other financials of Reliance Life Insurance as of 3rd Quarter FY2019-20:

  • Insurance Fund: Rs 869.86M
  • Reserve Fund: Rs 149.61M
  • Disaster Fund: 16.62M
  • Net Premium Earned: Rs 797.19M (+111.60% yearly growth)
  • Total No. of Policies Issued: 9,912 (-13.55% yearly negative growth)
  • Annualized EPS: Rs 4.20 or 4.20% (will probably increase after actuarial valuation)

Source: Reliance Life Insurance Financials (FY 2076-77)

Recent IPOs

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
  • How to apply: from Meroshare, and all C-ASBA approved banks and financial institutions
  • 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 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.

Micro-finance Companies in Nepal are established to empower rural livelihood by providing micro-credit loans.
Micro-finance Companies in Nepal are established to empower rural livelihood by providing micro-credit loans. | Source

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

Have you been allotted shares of microfinance companies often?

See results

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 has published an offer letter to issue 1,816,110 shares to the general public as its IPO. The IPO will receive applications from investors from March 7th, 2019 to March 13th. 2019.

The hydropower company is hoping to raise 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. | Source

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 is issuing 18,00,000 shares till March 11th, 2019. The issue can 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.
Company
No. of IPO shares
Total 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

How safe, in your opinion, is investment in Initial Public Offerings in Nepal?

See results

Recent IPOs in Nepal and Their Market Prices

(click column header to sort results)
Company  
Last date of IPO issue  
Date when the market price hit triple the investment price  
Time  
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
Taking into consideration as Initial Investment amount = Rs 100 and Triple = Rs 300 per share

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

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    • profile image

      sagar 

      14 months ago

      how to apply for promotor share

    • profile image

      23 months ago

      Ipo reading also

    • profile image

      sk111111 

      2 years ago

      how to apply for promoter shares???

    • profile image

      mahesh 

      3 years ago

      would it possible to provede ipo grading also

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