KATHMANDU, May 20: The Securities Board of Nepal (SEBON) has rejected the IPO (Initial Public Offering) applications of 14 companies. SEBON stated that the applications were rejected due to low net worth and the nearing expiration of power purchase agreements (PPAs) of some of the companies.
The SEBON has rejected IPO applications from companies in its pipeline, including 6 hydropower companies, 4 from the tourism sector, 1 media organization, 2 pharmaceutical companies, and 1 helicopter company. These companies have been instructed to reapply.
According to SEBON Spokesperson Niranjaya Ghimire, most proposals were rejected because the companies had a real net worth of less than Rs 90 without undergoing a proper revaluation. Out of the 14 companies removed from the IPO pipeline, 13 were found to have failed to meet the minimum required net worth.
24 companies preparing to issue IPOs worth Rs 6.5 billion
SEBON has advised these companies to meet the necessary financial criteria and reapply for IPO approval.
Similarly, in the case of Sanima Hydropower, SEBON rejected the IPO proposal because the remaining period of its electricity generation license is only 12 years, and its PPA is set to expire within the next 5 years.
The companies whose IPO applications were rejected by SEBON include Apex Hospitality, Orchid Holdings, Annapurna Cable Car, Thamel Plaza Hotel and Suites, Richet Jalbidhyut Company Pvt. Ltd, Beni Hydropower Project, Laughing Buddha Power Nepal ltd, Unique Hydro Company, Puwa Khola-1 Hydropower Station, Accord Pharmaceuticals, Sopan pharmaceutical ltd, Kantipur Television Network, Prabhu Helicopter, and Sanima Hydropower Limited.
Earlier, the Public Accounts Committee, under the House of Representatives, had instructed that companies with a net worth of less than Rs 90 per share should not be granted approval to issue IPOs. Citing this directive, SEBON made the decision to reject the IPO applications of these companies.
According to the SEBON, a total of 38 hydropower companies currently have IPO proposals in the pipeline, amounting to Rs 18.39 billion for the issuance of 179.91 million shares. Across all sectors, IPO proposals worth Rs 52.53 billion for the issuance of 369.29 million shares are currently awaiting approval.
