If you are thinking of investing in the initial share issue (IPO) at the rate of 100 rupees per share, then try to save money.
30 companies from different sectors have started issuing IPOs for the general public. Those companies have already applied to the regulatory body Securities Board for IPO permission. After getting permission from the board, the shares of that company will come to the market. When the secondary market is not growing as expected, the stock investors will get a good opportunity to manage their capital in the right place by investing in IPO.
There is a legal provision that shares must be issued within two months of receiving permission from the Securities Board. Based on this, experts say that more than two dozen companies will come to the IPO market within the next two months. 30 companies from different sectors who have applied to the Securities Board till Sunday are going to issue IPO worth 6 billion 64 crore 65 lakh 51 thousand 400 rupees (6 crore 43 lakh 78 thousand 654 shares).
Out of the 30 companies that have applied for share issue, 16 are from the hydropower sector (companies). 2/2 in insurance and hotel and tourism, 3/3 in microfinance, others and manufacturing and processing and one investment company.
Most of the hydropower companies that are currently in the process of share issuance permission are local and the rest are going to issue shares for the general public. 49 hydropower companies are listed in the stock market. According to the experts, the number of companies listed in the stock market will increase significantly within the current financial year and will reach more than 70 if we look at the number of companies that have issued shares but are not listed, are preparing for issuance and have applied for issuance permission.
Since there are many hydropower companies in the construction stage in Nepal, many hydropower companies have been seen among those issuing shares in recent days. The dominance of banks and financial institutions in the Nepali capital market is gradually decreasing. This is confirmed by the recent decrease in the share of banks and financial institutions and insurance and the increase in the share of other subgroups including hydropower. In the past years, the share of banks and financial institutions and insurance companies in the capital market was 80 to 90 percent.
However, this share has been decreasing in recent years, according to which the market capitalization share of securities of banks and financial institutions and insurance companies among listed companies is 67.7 percent. As of last May, the share of the hydropower sub-group to which hydropower companies are affiliated is 10.8 percent. Until May last year, this share was 6.5 percent.
The hydropower company should give at least 10 percent of the shares to the local people affected by the project. After allotment of shares to locals, shares should be issued for general public.
According to the new system, companies in the productive sector, including hydropower, must issue at least 10 percent more shares to the general public, except those affected by the project. The government and the regulatory bodies are blamed for not bringing the companies from the productive (real) sector into the stock market as expected. Experts say that with the increase in the number of hydropower companies, the dominance of financial sector companies in the stock market will decrease.
In recent times, there has been an increase in the issue of shares by real sector companies including manufacturing and processing, hotels and tourisms. In the budget of the current financial year, the government has provided that companies with a paid-up capital of 1 billion or more and an annual turnover of more than 5 billion rupees must issue shares and be listed in the secondary market. Many companies that have been implemented under this arrangement will have to be listed in the secondary market. From Kantipur Daily
