IPO in Nepal: A Complete Beginner's Guide
An IPO is your chance to buy shares in a company before they list on the stock exchange. Here is how IPOs work in Nepal, in plain language, from application to listing.
What is an IPO?
An IPO (Initial Public Offering) is the first time a company sells its shares to the general public. In Nepal, companies issue IPOs to raise money for expansion and, for many sectors (like hydropower, banks and microfinance), because regulation requires them to offer a portion of shares to the public.
Investors like IPOs because shares are sold at a low, fixed face value of NPR 100, and many companies list on the Nepal Stock Exchange (NEPSE) at a higher price, giving early applicants a gain. That is not guaranteed, but it is why IPOs are so popular in Nepal.
Who approves and manages IPOs
Every public issue in Nepal is approved and regulated by the Securities Board of Nepal (SEBON), the market regulator. A licensed issue manager (usually a merchant bank) handles the process, and applications are collected through the C-ASBA / Mero Share system run by CDS and Clearing Ltd (CDSC). Shares trade afterwards on NEPSE.
Types of IPO shares in Nepal
When a company issues an IPO, the shares are usually split into categories:
- Ordinary shares — open to the general Nepali public. This is the pool most people apply in.
- Shares reserved for locals — for residents of the district/area affected by the project (common for hydropower IPOs).
- Shares for Nepalis in foreign employment — a quota for migrant workers, applied for through the same Mero Share system.
- Shares for mutual funds and employees — separate reserved portions.
As an ordinary retail investor, you apply in the ordinary pool through Mero Share.
The IPO process, start to finish
- Approval: SEBON approves the issue and the issue manager announces open/close dates.
- Application: investors apply online via Mero Share; the amount is blocked in their bank (ASBA).
- Closing & allotment: after the issue closes, shares are allotted — by lottery if oversubscribed.
- Settlement: allottees have their money debited and shares credited to their Demat account; others get their block released.
- Listing: the shares list on NEPSE, usually within a couple of months, and can then be bought and sold on the secondary market.
Oversubscription and the lottery
Nepal has millions of Demat accounts and popular IPOs receive far more applications than there are shares — they are oversubscribed many times over. When that happens, allotment is a computerised lottery. In the most heavily oversubscribed issues, the fairest outcome is used: as many applicants as possible get the minimum 10 units, and the rest get nothing that round. This is why applying for the minimum is a common strategy — for a lottery, a bigger application usually does not improve your odds of the base allotment.
Understand the risks
IPOs are popular but not risk-free. A share can list below its expected price, the wider market can fall, and some sectors are more volatile than others. Treat IPO investing as one part of a plan, not a guaranteed profit, and never block money you cannot afford to have tied up. This guide is educational, not financial advice — do your own research and consider a licensed advisor.
Frequently Asked Questions
What does IPO stand for?
IPO stands for Initial Public Offering — the first sale of a company's shares to the general public, after which the shares list and trade on the Nepal Stock Exchange (NEPSE).
What is the face value of IPO shares in Nepal?
IPO shares in Nepal are issued at a face value of NPR 100 per unit (kitta). The minimum ordinary application is usually 10 units, about NPR 1,000.
Who regulates IPOs in Nepal?
The Securities Board of Nepal (SEBON) is the market regulator that approves every public issue. A licensed issue manager runs the offering, and CDS and Clearing Ltd (CDSC) handles applications via Mero Share.
Are IPOs in Nepal profitable?
Many IPOs list above their NPR 100 face value, which is why they are popular, but it is not guaranteed — shares can list flat or lower, and the market can fall. IPO investing carries real risk and is not a sure profit.
Why do I only get 10 units when I applied for more?
Popular IPOs are heavily oversubscribed, so allotment is by lottery. To spread shares fairly, most allottees receive only the minimum 10 units regardless of how many they applied for.
How long until IPO shares list on NEPSE?
After allotment, shares are typically credited to your Demat account and listed on NEPSE within roughly a few weeks to a couple of months, after which they can be traded on the secondary market.