A growing bottleneck at the Securities Board of Nepal (SEBON) has reached a critical point, with 98 companies now stranded in the IPO pipeline. The backlog has frozen over Rs 66.23 billion in potential capital, triggering a liquidity crunch for infrastructure projects—most notably in the hydropower sector—and threatening to stall Nepal’s energy momentum.
The Multi-Billion Rupee Backlog
According to the latest data from SEBON, the 98 applicants are seeking to issue a total of 442.17 million shares. The manufacturing and processing sector leads the volume in terms of value, but hydropower remains the most significantly impacted in terms of project viability.
Hydropower at the Breaking Point
The delay is more than a procedural headache for hydropower developers; it is a financial crisis. Most projects are structured on a 70:30 debt-to-equity ratio. While banks provide the 70% loan, the remaining 30% is expected to come from promoter investment and public IPOs.
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Bank Pressure: With IPOs stalled, developers are unable to fulfill their equity obligations. Banks are now reportedly halting further loan disbursements, leaving projects in various stages of construction at a standstill.
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Rising Costs: Developers are being forced to repeatedly renew underwriting agreements—which only last six months—and credit ratings, adding millions in avoidable administrative costs.
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Interest Burdens: The Independent Power Producers’ Association, Nepal (IPPAN) warned that the delay has already cost the industry billions in additional interest payments and project cost overruns.
Why the Stall?
The regulatory gridlock is attributed to a “leadership vacuum” and shifting policy goals.
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Leadership Turnover: SEBON was without a chairperson for nearly a year until late 2024. The subsequent chair, Santosh Narayan Shrestha, resigned on April 17, 2026, once again leaving the regulator in a state of uncertainty.
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The “Net Worth” Dispute: A directive from the Public Accounts Committee (PAC) previously mandated that companies must have a minimum net worth of Rs 90 per share to go public. Hydropower developers argue this is unfair, as projects naturally have lower net worth during their high-cost construction phases.
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Regulatory Compliance: SEBON officials maintain that delays are due to companies failing to meet stringent transparency and compliance requirements. “Approvals are granted without delay to those who meet all regulatory conditions,” stated a SEBON spokesperson.
Economic Fallout
The freeze comes at a time when the Nepal Stock Exchange (NEPSE) is showing signs of recovery and investor appetite for new listings is high. Market analysts warn that if the backlog isn’t cleared soon, it could erode investor confidence and permanently damage the private sector’s ability to lead Nepal’s transition from a power-deficit to a power-surplus nation.
For now, thousands of local residents—who are legally entitled to 10% of these project shares—and general investors remain in a state of “wait and watch” as the government weighs its next move to resolve the SEBON crisis.