Kathmandu. KATHMANDU: The restructuring of the Nepal Stock Exchange (NEPSE) has started.
A five-member study committee led by Prakash Jung Thapa, former chairman of the Nepal Accounting Board (NEPSE), has started its work on restructuring the NEPSE. Other members of the committee are Nepal Rastra Bank (NRB) Director Subhash Chandra Ghimire, Securities Board of Nepal (SEBON) Deputy Executive Director Rupesh KC, Securities Board of Nepal (SEBON) Deputy Executive Director Niraj Giri and other members of the committee.
The first meeting of the committee was held on Monday. “In the first meeting, appointment letters were received and general identification was done,” Parajuli said, adding, “The next meeting will be held on Monday.” After that, the restructuring of NEPSE will gain momentum. ’
According to Parajuli, the government has given 50 days to submit the report with suggestions on NEPSE restructuring. “The committee is preparing to move ahead accordingly,” he said.
Earlier, the high-level commission formed by the then government had also suggested the government to bring a new stock exchange along with the restructuring of NEPSE. It has been many years since NEPSE itself prepared a report stating the need for restructuring and sent it to the Ministry of Finance.
Following the recommendation of the High Level Commission, the Securities Board of Nepal (SEBON) had directed NEPSE to submit an action plan for restructuring. After NEPSE prepared the restructuring action plan, it has not been approved by the board of directors as the chairman has not come for a long time.
Nepse’s current share structure
Currently, the paid-up capital of NEPSE stands at Rs 1 billion. Currently, the government is the largest shareholder of NEPSE. NEPSE holds 5,866,245 units (58.66%) of the government’s shares.
Similarly, Rastriya Banijya Bank is the second largest shareholder. The bank has 1,122,974 units (11.23 percent) shares in NEPSE.
Employees Provident Fund (EPF) owns 1 million units (10 percent) of shares.
Similarly, Nepal Rastra Bank has 950,637 units (9.51 percent), Prabhu Bank 500,000 (5 percent), Laxmi Sunrise Bank 5 percent (5 percent) and other groups have 60,144 (0.60 percent) shares.
Share structure to be maintained after restructuring of Nepse
According to the report, a proposal has been submitted to the Ministry of Finance to increase the current paid-up capital to Rs 3 billion following the restructuring of NEPSE. The report has proposed to increase the government’s shareholding to 19.55 percent after the restructuring of NEPSE. The government will hold 58,66,245 units of shares.
Similarly, 1,122,974 units (3.74 per cent) of Rastriya Banijya Bank, 3.33 percent of Employees Provident Fund and 950,637 (3.17 per cent) of Nepal Rastra Bank have been proposed in the company.
Similarly, Prabhu Bank has 500,000 (1.66 percent), Laxmi Sunrise Bank has 5 percent (1.66 percent) and other groups have proposed 60,144 (0.20 percent) shares in the company.
As part of the restructuring, NEPSE has proposed to issue 30 percent i.e. 90 units of shares to the general public.
Similarly, 6.5 million units (21.67%) will be offered to domestic institutional groups and 4.5 million units (15%) to foreign strategic partners.
