KATHMANDU: Delays in issuing IPOs and right shares by the Securities Board of Nepal (SEBON) have caused energy sector investors to lose over Rs 108.5 billion, according to a study by the Independent Power Producers’ Association Nepal (IPPAN).
Since May 2023, 50 companies, 43 IPOs and 7 right shares, responsible for 975 MW of ongoing projects have faced construction delays due to postponed share issuance. IPPAN’s letter to Sebon on Thursday states that the delayed issuance prevented Rs 23.27 billion in capital raising, led to an additional Rs 1.240 billion in interest, increased project costs by Rs 24.30 billion, and resulted in Rs 71.78 billion in lost revenue.
The delays are attributed to SEBON’s prolonged vacancy in the chairman position and restrictive requirements in the securities laws, including a rule requiring over 90 percent net worth for share issuance. During this period, SEBON approved only 10 IPOs and 11 right shares.
IPPAN President Ganesh Karki, in the letter, requested Sebon to immediately process pending IPO applications, allow companies previously removed to reapply, and avoid separate issuance of post-production IPOs. He warned that continued inaction may force energy producers to resort to protests.
The letter emphasizes the legal and policy inconsistencies in SEBON’s current approach, arguing that withholding IPO approval until project completion contradicts the intent of financial regulations designed to support construction-phase funding. IPPAN also highlighted delays in listing shares on NEPSE, creating obstacles for domestic and international investors.
IPPAN stressed its commitment to institutional governance, citing a 12-point understanding signed with SEBON on September 10, 2023, aimed at improving transparency, accountability, and orderly development in Nepal’s energy sector.
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