From household lotteries to promoter exits and regulatory limbo, how IPOs turned into Nepal’s favorite gamble, and what it means for investors, companies, and the future of our stock market.

In Nepal, there are two things guaranteed to draw a massive crowd: a big wedding and a new IPO.

No, seriously. Think about it.

Over the past few years, Initial Public Offerings (IPOs) have morphed from a niche financial event into a full-blown national pastime. Every time a new company opens its doors to public investment, hundreds of thousands of us rush to apply on MeroShare.

It doesn’t matter if it’s a hydropower project in a district you can’t point to on a map, or a cement manufacturer you’ve never heard of. If it’s issuing shares, we’re in line.

Remember that phase? It felt like everyone was in on it. Your taxi driver? Applied. The aunty who runs the local tailoring shop? Applied. Your teenage cousin who just opened a bank account? You bet they applied.

The numbers are just bonkers. IPOs were getting oversubscribed by 10x, 50x, and sometimes even 100x. That means for every single share a company wanted to sell, there were dozens of people fighting for it.

So, what gives? Why did IPOs suddenly become the national sport? Why are companies scrambling to get listed on the stock exchange? And is all this hype actually good for Nepal, or is it just a big, flashy party?

Let's figure it out.

Why IPOs Are So Popular in Nepal

Let’s start with the basics.

An IPO is when a company sells a portion of its ownership; in the form of shares, to the general public for the very first time. In exchange, the company gets money from investors, which it can use to grow, pay off loans, or fund new projects.

Now, in most countries, investors pore over the details (revenue, risks, business model) before putting their money down.

In Nepal? Let’s just say we found a shortcut: the thrill of listing gains.

The Retail Investor’s Play: A Low-Risk Lottery

For most Nepalis, an IPO feels less like investing and more like buying a lottery ticket with incredible odds. You apply for a few thousand rupees, and if you’re one of the lucky ones who gets allotted 10 kitta, you could see its value double or even triple on the very first day of trading. For a while there, it felt like free money.

And let’s be honest, it’s way simpler than navigating the secondary market, where you need to be a pro at reading charts and tracking news. With an IPO, the strategy was simple: Apply, wait, and pray to get allotted. That’s it.

The Company’s Play: It’s Not Always About the Money

Now for the twist. Not every company goes public because it’s desperate for cash. Some are already profitable and backed by massive business houses. So why bother with the hassle of an IPO?

Because going public offers a lot more than just a fat cheque. Let’s list a few reasons companies in Nepal chase IPOs:

1. The Blue Tick Effect:
   Getting listed adds a layer of credibility. It’s like earning a blue tick on Twitter — except in the business world.
2. Trust Factor
   Public companies have to follow stricter rules. They publish financial reports, hold annual general meetings, and operate under tighter scrutiny. This makes banks, suppliers, and partners see them as a safer bet.
3. Stock as Currency
   Shares aren't just for trading. A listed company can use its stock to buy other companies or, more importantly, compensate stakeholders and even employees through SWEAT equity.
4. Keeping Your Best People
   Offering stock options (ESOPs)  in a publicly-traded company is a killer way to attract and keep valuable employees. Who wouldn’t want a piece of the company they’re helping build?
5. Exit for Early Investors
   Early investors need a way to cash out their investment eventually. An IPO is the perfect escape hatch.(We’ll talk about this in detail in the next section)
6. Future Fundraising
   Once a company is public, raising more money becomes easier. They can issue more shares later or even borrow at better interest rates.

So yeah, even a company swimming in cash has plenty of reasons to go public. It’s like graduating from a private school of business to a big public university.

The Promoter's Real Playbook: Legacy, Liquidity, and Exits

Okay, now for the part they don’t exactly put in the shiny brochures.

While IPOs are marketed with buzzwords like “expansion,” “nation-building,” and “growth,” many in Nepal are actually about something much simpler: an exit.

Let’s look at the classic hydropower model It often works like this:

• A group of promoters (the initial owners) start a company with some of their own money.
• They get big loans from banks to finance the construction of the power plant.
• Once the project is built (or almost built), they file for an IPO.
• The public’s money isn’t used to build the project. It’s used to pay back the promoters and the banks.

The public essentially buys the project after the riskiest part is over, giving the original promoters a nice cash-out. We call it the “Promoter’s Loop.”

This isn’t illegal, but it flips the story on its head. The IPO isn't the starting gun for a new project; it's the victory lap for an old one. It helps the owners clean up their balance sheets, reduce their debt, and get liquid cash in their hands.

And we’re seeing this playbook everywhere now; in cement, steel, hotels, you name it. These are established companies that don’t need your money to survive. They want it for better branding, easier loans, a public valuation, and of course, a partial exit for the owners.

That’s the unspoken truth behind many IPOs today. They're often less about funding the future and more about securing a legacy, and liquidity.

Five Years of IPO Boom: From Trickles to Tidal Waves

If you’ve used MeroShare anytime in the past few years, you’ve probably had this feeling: “Wait, didn’t we just apply for an IPO last week?” And you’d be right.

For a while, it felt like a new IPO result was dropping every other day. People were checking their allotments more often than their email.

But this wasn’t just hype, it was happening because of a real, measurable surge in IPO approvals.

Let’s break down the numbers.

*75 companies are currently in the pipeline to issue over Rs. 54 billion to the public.  

FY 2076/77: Just Getting Started

• Number of IPO approvals: 9
• Total capital raised: ~Rs. 4 billion

It was a quiet year, mostly made up of microfinance institutions and a few hydropower names. IPOs were still niche, and the crowd hadn’t caught on yet. MeroShare users were few and far between.

FY 2077/78: The Warm-Up

• Number of IPO approvals: 22
• Total capital raised: Over Rs. 15 billion

IPOs started hitting the market more frequently, and IPO result day became something to look forward to. People began opening MeroShare accounts just for IPOs. You probably helped your parents or cousins open theirs, too.

FY 2078/79: Liftoff

• Number of IPO approvals: 28
• Total capital raised: Over Rs. 7 billion

This was the year of the IPO boom. SEBON was approving IPOs like clockwork. Basically, the floodgates were open, everyone wanted in and MeroShare usage skyrocketed,( even though servers crashed during peak application windows.)

FY 2079/80: Peak IPO Mania

• Number of IPO approvals: 42
• Total capital raised: Over Rs. 22 billion

From cement giants to cable cars, hotels to insurance companies, it was a buffet of public offerings.

FY 2080/81: The Big Freeze

• Number of IPO approvals: 9
• Total capital raised: Rs. 10.7 billion

Just when people thought the IPO train would never stop, it did. And not because of lack of interest. For almost 11 months, SEBON didn’t approve a single IPO because the organization didn’t have a chairperson. One of Nepal’s most crucial financial regulators was essentially leaderless, and IPOs got stuck.

Yet, dozens of companies submitted applications, but no approvals came.

MeroShare dashboards started to gather dust, and IPO result screens went quiet. For once, investors had time to breathe.

So if you’re wondering why 2082/83 suddenly feels like an IPO avalanche, it’s because of this bottleneck.

Think of it like a traffic jam. The cars kept coming, but the traffic light stayed red for almost a year. And now? It’s green again.

The question is: what happens when everyone hits the accelerator at the same time?

The Current IPO Pipeline: A Tsunami in the Making

So, what happens when you unblock a pipeline that’s been building pressure for a year?

You get flooded.

Right now, SEBON is sitting on one of the biggest IPO backlogs in Nepali history. Let's look at the numbers:

• 75 companies are in the queue.
• They’re planning to raise over Rs. 54 billion.

So, who's in this massive line?

Hydropower: Still the King

More than 70% of the pending applications are from hydropower companies. But, most people are not aware that many of these projects are still just blueprints and construction sites. So when you apply, you’re not buying a working power plant; you’re buying the hope that one day, it becomes one.

Cement & Steel: Big Money, Bigger Ambitions

Next up are the industrial heavyweights like Jagdamba Steel and Ambe Cement. These aren't speculative projects; they are fully operational, cash-generating machines. They’re the kind of IPOs that make you pay close attention, if the price is right.

Some are even planning premium priced IPOs, like Century Energy at Rs. 275.11 per share, Chhaya Devi Complex Limited at Rs. 400 per share, and so on

Hotels, Tourism, and Beyond

We’re also seeing IPO filings from hotels, cable cars, and even Dish Media. The logic here is simple: post-COVID optimism. Everyone’s betting on a travel and consumption rebound, and they want our money to fuel it.

Get ready. Your MeroShare app is about to get very, very busy again. The quiet days are over, and checking the IPO result might just become a daily ritual once more.

The SEBON Scandal: Power, Politics, and 5% Commissions

Now, let's talk about the drama. The stuff that makes you question the whole system.

In early 2082, Nepal’s anti-corruption watchdog (CIAA) raided the offices of SEBON. Why?

Because of explosive allegations that companies were being asked to pay 5-7% commissions under the table just to get their IPOs approved.

This was a massive wake-up-call. And it should make you, a MeroShare user, furious. Because if the approval process is corrupt, how can you trust anything that follows? It makes you wonder if the next IPO result is genuinely random or if the deck is stacked from the start.

Without credibility, the whole system crumbles. People stop trusting the market, and the whole IPO boom could go bust.

So, Are We in an IPO Bubble?

Let’s be honest with ourselves for a minute.

When your college-going cousin and your retired uncle are both refreshing MeroShare to check the same IPO result, you know something is up. The IPO craze has all the classic signs of a financial bubble.

And the thing about bubbles is, they feel absolutely fantastic, right before they pop.

So, how did we get here? Let's look at the ingredients of this bubble, one by one.

1. The Great IPO Rush (aka FOMO)

Let's call it what it is: IPO investing in Nepal stopped being about brains and started being about vibes.

MeroShare made it almost too easy. For just Rs. 1,000 and a few clicks, you were in the game. For many, applying for an IPO became a national lottery. You didn’t need to know what the company did; you just needed to get your 10 kitta, flip it on listing day, and celebrate.

When millions of us do this, it creates a self-feeding cycle of hype. Every new IPO becomes a bigger event. Every IPO result day becomes a mini-festival on social media. People rush into the next offering, not because they believe in the company, but because they’re terrified of missing out.

2. The 'Free Money' Illusion

A huge driver of this mania was a simple trick: deliberately underpricing IPOs.

Companies would offer shares at Rs. 100, knowing full well the market would scream for them. Why? Because a massively oversubscribed IPO makes the company look like a rockstar.

This fueled the expectation that every IPO was a guaranteed 100% return on day one. But what happens when that easy money train slows down? We’re already seeing it. Newer IPOs are having quieter listings, leaving people holding shares they thought would be a rocket to the moon, only to find they're stuck in a traffic jam.

3. Are We Buying Junk?

Over 1 in 4 companies listed in our stock exchange is losing money.

Read that again. 

They are unprofitable, and yet, many of them sailed through the IPO process. How? Because our system was more focused on paperwork than on quality. Weak companies, firms with no clear path to profit, and projects designed solely for promoters to cash out were all allowed to come to the public for money.

It’s like buying a beautifully painted car without ever checking if there’s an engine inside.

4. The 'One for Everyone' Strategy

You know this scene. You’ve probably lived it.

One household opens five DEMAT accounts; one for Dad, one for Mom, one for you, and one for each of your siblings. The strategy here is to apply for every single IPO from all five accounts to maximize the chances of at least one person getting allotted shares.

Did anyone read the 200-page prospectus? Nope.

Did anyone check the company's financials? Of course not.

You just applied, waited for the IPO result, and hoped for the best.

Now multiply that by hundreds of thousands of households. You get a market running on pure hope and zero homework.

How Does This End?

When a bubble like this starts to deflate, it’s not pretty.

First, the easy listing day gains shrink. That Rs. 100 share might only list at Rs. 105. Or worse. Then, the people who joined the party late get burned, left holding bags of overpriced stock.

Finally, public trust dies. And in a market like ours, trust is everything.

The bottom line is that our IPO boom was built on a fragile foundation of herd behavior, easy access, weak rules, and a collective refusal to look under the hood. Unless we get smarter as investors and the rules get tougher for companies, we risk turning a golden opportunity into a painful lesson.

And when a bubble this big pops, it doesn’t just whisper. It bangs.

Where Do We Go From Here?

If we want Nepal’s IPO ecosystem to grow stronger, not just bigger, we need to fix a few things. Quickly.

A. What SEBON Needs to Do

1. Publish clear approval timelines
   Companies shouldn’t be stuck for months (or years) waiting for a response.
2. Introduce IPO rating or risk grading
   A system that tells investors; especially new ones, whether an IPO is high-risk, moderate, or stable.
3. Increase transparency
   Let the public see the IPO pipeline, approval status, and reasons for rejection.
4. Tighten post-listing governance
   Companies that go silent after listing should face real consequences, not just gentle reminders.

B. What Investors Need

1. Better tools
   MeroShare is useful, but limited. There’s no easy way to compare past IPO results, track performance, or analyze fundamentals.
2. More education
   Many investors apply based on gut feelings or hearsay. It’s time to teach people how to read a prospectus, evaluate risk, and think beyond the listing day.
3. Stop treating IPOs as guaranteed profit machines
   They’re investments. And investments carry risk, even when the hype says otherwise.

C. What the Market Needs

1. Stronger institutional participation
   Right now, the IPO game is dominated by retail investors. We need banks, mutual funds, and pension funds to play a bigger role; not just in applying, but in holding companies accountable.
2. More listings, not just from cash-hungry firms
   Nepal needs strong, stable, revenue-generating companies to go public; not just those looking for a quick cash grab.

Final Thoughts

If you want to understand where Nepal’s economy is headed, just look at its IPO market.

It’s ambitious. Energetic. Overflowing with optimism.

But also chaotic. A bit unregulated. And sometimes too focused on quick wins instead of long-term value.

The IPO boom shows that Nepal has capital, and people willing to invest, and that’s a good thing, but it also reveals gaps in regulation, corporate accountability, and investor education.

It’s easy to measure how many IPOs were approved. But the real measure of success? How many of those companies actually made life better for the people who trusted them.

And that’s the future we should aim for.

The goal should be better IPOs and not more IPOs.