Comprehensive Data Compilation on Lock-In Periods of Hydropower Companies Listed on NEPSE

A lock-in period refers to a set timeframe during which investors are not allowed to sell or transfer their shares, a rule generally imposed through regulations or contractual terms to maintain stability and curb short-term speculation. In Nepal, companies in sectors such as hydropower, investment, manufacturing & processing, and hotels are subject to a mandatory three-year lock-in period on NEPSE after IPO allotment to the public. For hydropower and manufacturing & processing firms, both promoters and project-affected locals must hold their units throughout this period. In the investment and hotel sectors—where there is no separate IPO reservation for locals—the lock-in requirement applies only to promoter shares. This setup ensures long-term commitment from key stakeholders and limits abrupt sell-offs during the early phase of a company’s market presence.

Regulators highlight that combining the three-year lock-in rule with the provision allowing companies to distribute dividends from their first profitable year creates a balanced approach for both investors and the market. By requiring promoters to stay invested in the initial years, the market is protected from sudden, large-scale disposals of shares during uncertain conditions. This mechanism plays a vital role in preserving market confidence, enhancing resilience, and supporting sustainable growth within Nepal’s capital markets.

The lock-in duration applicable to listed hydropower companies is detailed below:

The Nepal Stock Exchange (NEPSE) currently has 97 listed hydropower companies. Among those companies actively traded, a considerable portion has already completed their lock-in periods.

In 2025 alone, two companies will see their lock-in periods expire. This will be followed by nine companies in 2024, sixteen in 2026, and an additional seven companies in 2028.