Pipeline shares will now be reviewed and cleared based on the Financial Statements Review Criteria, 2081, implemented on April 14 under former Chairman Santosh Narayan Shrestha. While SEBON has mobilized two specialized internal committees to draft long-term market reforms, the April criteria will serve as the immediate benchmark to evaluate pending applications.
According to board sources, every company that applied for an IPO prior to April 14 must strictly adhere to the updated financial review framework to receive issuance approval. The initiative aims to filter out underperforming assets and ensure only high-quality shares enter the capital market.
Key provisions under the April criteria include:
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Trade Receivables Audit: In-depth financial investigations will be triggered if over 75% of a company’s sales income is tied up in trade receivables.
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Related-Party Transactions: Strict issuance permissions will apply to companies conducting over 30% of main asset turnover with associated individuals, or those frequently altering accounting policies.
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Capital & Net Worth Thresholds: Companies whose net worth falls below half of their paid-up capital after adjusting for government taxes and duties will be barred from issuing an IPO.
To address broader market issues, SEBON has formed two special committees led by senior directors:
| Committee Name |
Coordinator |
Key Responsibilities |
| Primary Market Reform Committee |
Binay Dev Acharya (Director) |
Overseeing IPO issuance procedures, enhancing book-building transparency, and setting actual valuation standards. |
| Secondary Market Reform Committee |
Rupesh KC (Head of Supervision Department) |
Supervising secondary market trading, curbing market distortions, and recommending policy changes to boost transaction credibility. |
With nearly 6 million prospective investors awaiting new offerings, SEBON officials maintain that the temporary halt was necessary to safeguard market integrity and prevent "junk shares" from reaching retail investors.
Moving forward, SEBON will grant immediate approvals to companies fulfilling the April standards, while the two newly formed committees finalize long-term policy blueprints for the future of Nepal's capital market.
