NEPSE-Listing of Six Companies After Allotment Faces Extended Delay

The Securities Board of Nepal (SEBON) granted approval to 42 companies to float its Initial Public Offering in the recently concluded financial year 2079-80. 

Among the 42 companies, six companies have completed IPO issuance and allotment processes for all phases. However, their listing in the Nepal Stock Exchange (NEPSE) is still due. 

The following companies concluded IPO allotment for the general public on the said dates: 

• Nepal Republic Media Limited (NRML): June 26; ie, (i.e., Ashad 11, 2080): 37 days: Mega Capital Markets Limited 
• Three Star Hydropower Limited (TSHL): July 04, (i.e., Ashad 19, 2080): 29 days: Himalayan Capital Limited
• Upper Syange Hydropower Limited (USYHL): July 07 (i.e., Ashad 22, 2080): 26 days: Siddhartha Capital Limited 
• IME Life Insurance Company Limited (IMELICL): July 15 (i.e., Ashad 30, 2080): 18 days: Civil Capital Market 
• Ghorahi Cement Industry Limited (GCI): July 16; (i.e., Ashad 31, 2080): 17 days: Himalayan Capital Limited
• Kutheli Bukhari Small Hydropower Limited (KBSHL): July 23 (i.e., Shrawan 07, 2080): 10 days: NMB Capital Limited

Talking to Sharesansar correspondent, Murahari Parajuli, the Company Secretary, and Information Officer at NEPSE, confirmed that the listing application from Nepal Republic Media was only recently received by NEPSE. "The company has submitted the listing application, and the shares of the company will be listed promptly in a matter of one to two days," shared Parajuli.

In response to a question about the extended delay in listing companies, even after allotment to the general public, Parajuli stated that the responsible parties for this delay are the respective issue managers. He claimed that NEPSE has been working swiftly to conduct all listing procedures, but any and all delays have occurred due to the late submission of listing applications.

Similarly, it was learned through Parajuli that Three Star Hydropower had submitted a listing application and required documents, but the received documents were incomplete. Hence, NEPSE has requested them to re-submit the completed documents.

In the same manner, Parajuli affirmed that, as of today, the required documents and listing application from Upper Syange Hydropower have not been received.

Lastly, regarding IME Life Insurance Company, Parajuli confirmed that all relevant documents have been received, and its shares are due to be listed promptly.

Parajuli shared that since the shares of the companies are yet to be listed on the stock exchange, NEPSE holds no jurisdiction for any probe into the matter. However, they collected the funds via IPOs and have been delaying, which showcases their intentions.

According to Himalayan Capital, the listing application and required documents for Ghorahi Cement have been submitted to NEPSE; however, the documentation submission at CDS and Clearing Limited is still pending. Therefore,  the listing will happen soon too, upon completion of checking by the concerned authorities.

Similarly, regarding Three Star Hydropower, Himalayan Capital did not entertain the question about NEPSE's request for re-submission and refused to share any details. They remained firm in stating that the listing application and documentation have been submitted to NEPSE. "I have not asked what happened at NEPSE. NEPSE will know what happened at NEPSE," said the capital.

According to NMB capital, the issue manager for the IPO issuance of Kutheli Bukhari Hydropower, the application at CDS and Clearing limited has been submitted and soon listing application and all required documents at NEPSE will be submitted for approval and subsequent listing at the stock exchange.

The untimely listing of shares poses significant disadvantages for investors, as it hinders the smooth flow of their funds, locking their money for an uncertain period and ultimately demotivating their investment endeavors. In an era where everything is becoming increasingly digitalized, it is imperative for all stakeholders to act promptly and embrace efficient practices to foster a friendly and investor-oriented environment. The fact that a listing process can be accomplished within a week raises valid questions as to why there are unnecessary delays spanning months. Such prolonged delays not only frustrate investors but also instill doubts about the transparency and efficacy of the market. This lack of timely listing may impede investors' ability to capitalize on favorable market conditions, affecting their potential returns and overall investment strategies. Therefore, ensuring a swift and efficient listing process is paramount to instilling confidence and engagement among investors, promoting a thriving and robust financial ecosystem.