SEBON IPO Rule Change Requires 20% Public Offering

Nepal’s Securities Board (SEBON) is bringing a major shift in its policies regarding Initial Public Offerings. According to the new amendment, every company planning to issue an IPO must now offer at least 20% of its paid-up capital to the public. This SEBON IPO rule change is aimed at promoting transparency, increasing public participation, and protecting small investors.

Until now, companies could issue IPOs with much smaller public allocations. With the SEBON IPO rule change, firms will have to float a larger portion of shares, ensuring that the general public gets fair access to ownership and that stock prices are determined through broader market participation. This rule is being introduced as part of broader amendments to the Securities Registration and Issuance Regulations.

SEBON believes that increasing the minimum public issue size will strengthen Nepal’s capital market. A larger public float will lead to more accountability, better price discovery, and lower chances of insider manipulation. The SEBON IPO rule change is expected to raise market standards and discourage weak or unprepared companies from entering the market.

The change also brings in more responsibility for companies. They must now meet stricter financial standards and complete more rigorous documentation to qualify for IPO approval. Firms that cannot meet the 20% requirement may have to delay their IPO plans or restructure their shareholding.

For investors, this update is a positive step. Although the number of IPOs may temporarily decline, those that do get listed are likely to be more reliable and transparent. With more shares available to the public, individual investors will have greater access and improved chances of allotment. Overall, the SEBON IPO rule change improves market fairness and builds investor confidence.

This bold move by SEBON is designed to create a more stable and trustworthy IPO environment. While it may reduce the frequency of IPOs in the short term, it lays the foundation for a healthier and more credible stock market in Nepal.