IPPAN objects to IPO directive, demands removal of net worth 'cap'
The Independent Power Producers' Association, Nepal (IPPAN) has objected to the draft of the Nepal Securities Board's new IPO directive. IPPAN has specifically demanded the removal of the per-share net worth 'cap' for hydropower projects.
Kathmandu — The Independent Power Producers' Association, Nepal (IPPAN) has objected to the new criteria for initial public offerings (IPOs). IPPAN has expressed dissatisfaction with the draft of the 'Guidelines on General Eligibility for Public Offering, 2083' prepared by the Nepal Securities Board.
IPPAN has particularly objected to the issue of net worth. The draft states that the per-share net worth of an organized institution issuing an IPO must not be less than the paid-up value. If the directive is approved, companies with a net worth of less than 100 rupees will not be allowed to issue an IPO. For this reason, IPPAN has demanded that this provision be removed for manufacturing industries and hydropower projects.
According to IPPAN, during the construction period, the net worth may fall below 90 rupees due to the value of assets, and the income situation after construction differs. Therefore, IPPAN has emphasized that hydropower projects should not be barred from issuing IPOs based solely on net worth.
Similarly, IPPAN has also demanded a review of the draft. Currently, nearly 3 dozen companies have applied to the Securities Board for IPO issuance. These companies are planning to issue 16.83 million shares worth 17.19 billion rupees.