SEBON Introduces Stricter Criteria for Investment Companies Seeking IPOs

The Securities Board of Nepal (SEBON) has revised its regulatory framework governing Initial Public Offerings (IPOs) of investment companies, introducing more stringent standards aimed at enhancing transparency, financial discipline, and investor protection.

Under the new guidelines, investment companies must meet the following key requirements to be eligible for public issuance:

• Minimum Paid-Up Capital: Rs. 50 crore

• Operational Track Record: The company must have been in operation for at least three years and must have recorded profits in the last two consecutive fiscal years

• Sector-Specific Investment: Companies are required to invest in designated productive sectors such as energy, agriculture, communications, tourism, and manufacturing

• Mandatory Credit Rating: A credit rating of at least one level above the baseline is required

According to SEBON, these revised standards are intended to ensure that only financially sound and transparent investment companies are allowed to raise capital through IPOs. The move is expected to strengthen investor confidence and promote long-term stability in the capital market.