Kathmandu. The Securities Board of Nepal has removed the IPO of 14 companies from the pipeline.
The Securities Board of India (Sebi) has removed the IPOs of 14 companies from the pipeline for not meeting the standards. Of them, six are from hydropower group, five from hotel and tourism group, two from production and processing group and one from another group.
Laughing Buddha Power Nepal, Unique Hydel Company, Sanima Hydropower, Richet Hydropower Company, Puwakhola-1 Hydropower and Beni Hydropower are among the ipos removed from the pipeline.
Similarly, the ipo of Thamel Plaza Hotel and Suites, Orchid Holdings, Annapurna Cable Car, Apex Hospitality and Prabhu Helicopters of Hotel and Tourism Group has also been removed from the pipeline. The securities board has also removed the IPO of Sopana Mamaceuticals and Accord Pharmaceuticals of production and processing group and Kantipur Television Network of other groups from the pipeline.
About one and a half years ago, the Public Accounts Committee had directed the Securities Board not to give IPO permission to companies with a net worth of less than Rs 90 per share.
Similarly, the High-Level Economic Reform Suggestion Commission had suggested the government to make arrangements to allow IPO only after hydropower companies start generating electricity.
Similarly, in its 62nd annual report recently, the Office of the Auditor General has pointed out that hydropower companies can issue shares to the general public at the construction stage, so the construction may not be completed even for three years after the issue of shares and the founders can sell shares after three years. The report has suggested that the interest of the general investors should be protected by coordinating among the concerned agencies regarding the impact of the project construction and the risk to the general investors from it.
Based on the suggestions and opinions of these bodies, the Securities Board has removed the IPO of these companies from the pipeline. According to securities board sources, 13 of the companies removed from the pipeline have a net worth of less than Rs 90 per share. “An IPO of a hydropower company has been removed from the pipeline as the PPA period is only five years, which could put the public’s investment at risk,” the source said.
Securities Board spokesman Niranjay Ghimire said that the financial statements submitted by the companies have been removed from the pipeline. “The IPO of the company that meets the criteria will be re-pipelined,” he said.
Spokesperson Ghimire said that the securities board has taken this step for the benefit of the general public.
