The newly appointed leadership of the Nepal Securities Board (SEBON), headed by Dr. Gopal Bhatta, appears set to face one of its biggest immediate challenges—clearing a massive backlog of Initial Public Offering (IPO) applications in a transparent, efficient, and investor-friendly manner.

According to the latest data released by SEBON’s regulatory division, IPO applications worth NPR 69.30 billion are currently awaiting approval. Due to prolonged leadership instability and policy uncertainty within the securities regulator, Nepal’s primary market has remained largely inactive for an extended period, resulting in a significant capital pipeline being held back.

At present, a total of 104 companies across six active sectors are waiting for approval to issue 472.89 million shares to the public.

Sector-Wise Breakdown of the IPO Pipeline

An analysis of the applications registered with SEBON shows that the manufacturing and processing sector holds the largest share in terms of issue size, while the hydropower sector leads in the number of companies waiting to enter the market.

(Notably, there are currently no IPO applications from commercial banks, development banks, finance companies, life insurance companies, microfinance institutions, or non-life insurance companies.)

Manufacturing Sector Dominates IPO Value

In terms of total capital sought, the manufacturing and processing sector represents the largest portion of the pipeline, accounting for 51.01 percent of the total.

A total of 30 companies from this sector are seeking approval to issue IPOs worth NPR 35.35 billion.

This unusually high figure is driven largely by major industrial groups preparing to issue shares at premium prices, including companies such as Jagadamba Steel, Shaurya Cement, Maruti Cement, Riddhi Siddhi Cement, and Ambe Steel.

Hydropower Sector Leads in Company Count

Although manufacturing leads in issue value, the hydropower sector remains the largest by number of applicants.

Currently, 34 hydropower companies are lined up to enter Nepal’s stock market, collectively seeking approval to issue IPOs worth NPR 17.50 billion, representing 25.25 percent of the total pipeline.

Micro-Insurance Sector Records the Smallest Demand

The newly licensed micro-insurance segment has the lowest IPO demand among all sectors.

Only three companies—Protective Micro Insurance, Star Micro Insurance, and Liberty Micro Life Insurance—have submitted applications, seeking approval to issue shares worth a combined NPR 675 million, accounting for only 0.97 percent of the total IPO market pipeline.

Premium Pricing Raises Questions for New Leadership

One of the most sensitive issues before Dr. Bhatta is expected to be the approval process for manufacturing companies seeking premium-priced IPOs.

Some of the major proposed premium rates include:

Maruti Cement Limited – NPR 426 per share (Face Value: NPR 100 + Premium: NPR 326)
Shaurya Cement Industries Limited – NPR 333 per share
Jagadamba Steels Limited – NPR 330 per share
Ambe Steels Limited – NPR 303 per share
Riddhi Siddhi Cement Limited – NPR 246 per share

While bringing real-sector companies into the capital market is generally viewed positively, premium pricing methodology and financial governance have previously generated significant controversy for SEBON’s former leadership.

Concerns over inflated valuations, alleged intermediary influence, and excessive pricing of shares for retail investors have led to public criticism and regulatory scrutiny. How the new chairman evaluates these large premium IPO proposals may become an important measure of his independence and regulatory credibility.

Hydropower Applications Face Net Worth Challenges

The large number of hydropower companies waiting in the pipeline is also linked to regulatory requirements related to minimum net worth.

Reviewing application remarks shows that several companies remained delayed because their net worth per share had fallen below NPR 90, preventing approval.

Examples include:

Richet Hydropower Company Limited – Application process reportedly moved forward after net worth exceeded NPR 90 per share.
Puwa Khola-One Hydropower Limited – Reapplied after meeting the net worth requirement.
Prabhu Helicopter Limited (Other Group) – Approval process progressed after improving net worth levels.

Market observers argue that companies carrying weak balance sheets and high debt burdens should not be allowed into the primary market without demonstrating stronger financial fundamentals.

Analysts suggest that SEBON should closely evaluate commercial operation dates (COD), profitability outlook, and balance sheet strength before granting approvals.

Tourism and Service Sectors Also Show Growing Interest

The current IPO list also highlights increasing participation from tourism and hospitality.

A total of 18 companies from the hotel and tourism sector are seeking to raise approximately NPR 6.45 billion through public offerings.

Projects and businesses including Apex Hospitality, Annapurna Cable Car, Akama Hotel, Thamel Plaza Hotel (Ramada Encore), Hotel Sabrina, and Swarnim Hotel (Holiday Inn Express) are aiming to raise capital through Nepal’s stock market.

Similarly, established service-sector businesses under the “Others” category—including Dish Media Network, HAMS Hospital, and IME Limited—remain in the approval pipeline, which could contribute to broader market diversification.

Policy Commitments and the Road Ahead

The current government coalition partner, the Rastriya Swatantra Party (RSP), had pledged in its policy commitments to reform Nepal’s IPO approval system and further streamline the book-building process.

With Dr. Bhatta’s appointment, expectations have increased that these commitments may now move toward implementation.

To safely channel this NPR 69 billion capital pipeline into the market, experts believe SEBON should prioritize three key reforms:

Transparent Pricing Mechanisms – Introduce objective and transparent valuation models for premium pricing and book-building.
Stronger Ratings and Supervision – Discourage financially weak companies while encouraging fundamentally sound businesses.
Time-Bound Approval Process – Establish clear approval timelines to reduce unnecessary delays and regulatory bottlenecks.

The existence of nearly NPR 69.30 billion worth of stalled IPOs highlights both the capital needs of Nepal’s private sector and the operational challenges facing market regulation.

With a background in central banking and academic specialization in capital markets, Dr. Gopal Bhatta’s tenure will likely be closely watched. Balancing investor protection with efficient capital formation may become the defining challenge of SEBON’s new leadership.

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