IPO Delays Cost Energy Sector Over Rs 108 Billion, IPPAN Warns

The Independent Power Producers’ Association Nepal (IPPAN) has warned that delays in approving IPOs and right shares by the Securities Board of Nepal (SEBON) have cost energy sector investors more than Rs 108.5 billion.

According to an IPPAN study, since May 2023, 50 companies, including 43 IPOs and 7 right shares tied to 975 MW of ongoing projects, have faced construction setbacks due to stalled share issuance. The delays blocked Rs 23.27 billion in capital raising, added Rs 1.24 billion in interest expenses, increased project costs by Rs 24.30 billion, and led to an estimated Rs 71.78 billion in lost revenue.

IPPAN attributed the problem to SEBON’s prolonged leadership vacuum and restrictive securities regulations, such as the requirement for companies to maintain over 90 percent net worth before issuing shares. During this period, SEBON approved only 10 IPOs and 11 right shares.

In a letter submitted on Thursday, IPPAN President Ganesh Karki urged SEBON to immediately clear pending IPO applications, reconsider previously rejected companies and avoid separating post-production IPOs. He cautioned that continued inaction could push energy producers toward street protests.

The association also criticized SEBON’s policy of withholding IPO approvals until project completion, saying it undermines financial rules designed to support construction-phase funding. IPPAN further noted delays in listing approved shares on NEPSE, which it said is discouraging both domestic and foreign investors.

Reiterating its commitment to good governance, IPPAN highlighted a 12-point agreement it signed with SEBON in September 2023 to strengthen transparency, accountability, and structured growth in Nepal’s energy sector.