SEBON knows what is broken in IPO market. Fixing it is the harder part
Summary
SEBON’s new white paper admits Nepal’s IPO market suffers from fixed pricing, chronic oversubscription and weak institutional participation, and lays out reforms to modernize primary market rules. The plan also targets book building, merchant banking due diligence and hydropower IPO eligibility, but execution remains the harder challenge.
Key Points
- The Securities Board of Nepal’s 2026 white paper openly identifies major weaknesses in Nepal’s primary capital market, including administrative IPO pricing and chronic oversubscription.
- Only two companies have used book building since the mechanism was legalized in 2017, reflecting the lack of a deep institutional investor base.
- The paper proposes reforms to book building, QIB participation, anchor investors and due diligence standards for merchant bankers.
- Hydropower IPO eligibility is singled out for a phased framework because of the sector’s unique construction and hydrology risks.
