IPOs (Initial Public Offerings) are one of the most popular entry points for new investors in Nepal. Every time a company opens an IPO, thousands of applications pour in — often oversubscribing by 20x or more. Yet many applicants do not fully understand how the process works, why they get allotted or not, and what happens next.
This guide explains the entire IPO lifecycle in Nepal from announcement to listing.

What Is an IPO?

An IPO is when a company sells its shares to the general public for the first time. Before an IPO, the company is privately held — owned by its promoters. After the IPO, shares are listed on NEPSE and anyone can buy or sell them.
Companies issue IPOs to raise capital for expansion, meet regulatory requirements (some sectors require public ownership), or allow promoters to partially exit.

Types of Public Issues in Nepal

Not every share issue is an IPO. Nepal has several types:
IPO (Initial Public Offering) — The first time a company offers shares to the public. This is what most people mean when they say "IPO."
FPO (Further Public Offering) — When an already-listed company issues additional new shares to the public. Less common but occurs when companies need to raise more capital.
Right Share — Offered only to existing shareholders at par value (usually NPR 100). Not available to the general public.
Bonus Share — Free shares given to existing shareholders from the company's retained earnings. No application needed.
Debentures — Debt instruments that pay fixed interest. Some companies issue debentures to the public through a similar application process.

The IPO Process Step by Step

1. SEBON Approval

Before a company can issue an IPO, it must get approval from SEBON (Securities Board of Nepal). SEBON reviews the company's financials, prospectus, and compliance with regulations. The "SEBON Approved" list shows companies that have received this approval but have not yet opened their IPO.

2. Issue Manager Appointment

The company appoints an Issue Manager (also called a merchant banker) to manage the IPO process. Major issue managers in Nepal include NMB Capital, NIBL Ace Capital, Prabhu Capital, Siddhartha Capital, and Laxmi Capital. The issue manager handles everything from printing the prospectus to processing applications.

3. Opening and Closing Dates

The IPO opens on a specific date (announced in national newspapers and financial portals) and remains open for a set period — typically 3 to 5 days. Some IPOs close early if they are heavily oversubscribed.

4. Application Through MeroShare

All IPO applications in Nepal now go through MeroShare using the ASBA (Application Supported by Blocked Amount) process.
Here is how to apply:
  1. Log in to your MeroShare account at meroshare.cdsc.com.np
  2. Go to "My ASBA" section
  3. Select the company whose IPO is open
  4. Choose your DP (Depository Participant) and bank
  5. Enter the number of kitta you want to apply for (minimum 10 for most IPOs)
  6. Enter the amount — this is kitta × price per share (usually NPR 100 par value)
  7. Submit the application

5. ASBA: How Payment Works

When you apply, the money is not immediately taken from your bank account. Instead, it is "blocked" — the amount remains in your account but you cannot withdraw it. This is the ASBA system.
If you are allotted shares: the blocked amount is debited. If you are not allotted: the amount is unblocked and available to you again.
This means you earn interest on the blocked amount during the application period, which is an advantage over the old system where you had to send a cheque.

How Allotment Works

This is the part most people find confusing.

Oversubscription

Almost every IPO in Nepal is oversubscribed. If a company offers 1 lakh (100,000) shares and 5 lakh people apply for 10 kitta each (total demand: 50 lakh shares), the IPO is 50x oversubscribed.

The Lottery System

When oversubscribed, CDSC conducts a computerized lottery to determine allotment:
  1. First priority: Every valid applicant is considered for the minimum allotment (usually 10 kitta)
  2. If even 10 kitta per applicant exceeds supply, a random lottery selects which applicants receive shares
  3. Selected applicants receive 10 kitta regardless of how many they applied for
  4. Any remaining shares after minimum distribution may go to larger applicants proportionally
The key point: applying for more kitta does not increase your chances in the lottery. Whether you apply for 10 kitta or 500 kitta, your probability of getting allotted is the same. This is why many families apply from multiple accounts — each DMAT account counts as one application.

Allotment Timeline

After the IPO closes:
  • Allotment typically happens within 5-7 business days
  • Results are published on the issue manager's website and MeroShare
  • Shares are credited to allotted applicants' DMAT accounts
  • Refund (unblocking) for non-allotted applicants happens within 3-5 business days after allotment

Checking Your IPO Result

You can check whether you were allotted through:
  • MeroShare: Log in → My ASBA → Check your application status
  • CDSC IPO Result portal: Enter your BOID number (16 digits) and company name
  • Issue Manager's website: Each issue manager posts results on their site
For families with multiple DMAT accounts, checking each one individually is time-consuming. Bulk checking tools let you enter all your BOIDs at once and see results in a single view.

After Allotment: What Happens Next

Once shares are credited to your DMAT:
  1. Wait for listing — The company must list on NEPSE within a few weeks of allotment
  2. Opening day price — NEPSE sets an opening range based on the company's fundamentals. Most IPOs list at a premium (higher than the NPR 100 issue price)
  3. You can sell immediately — Once listed, you can sell through your broker's TMS on the first trading day itself
  4. Or hold long-term — If you believe in the company's fundamentals, holding for dividends and growth is also valid

How Much Can You Make from IPOs?

It varies enormously. Historically:
  • Banking sector IPOs often list at 200-400% premium (a NPR 100 share opening at NPR 300-500)
  • Hydropower and insurance IPOs typically list at 100-300% premium
  • Some IPOs have listed with smaller premiums of 50-80%
However, these are historical patterns and not guaranteed. The listing premium depends on market conditions, company quality, sector sentiment, and overall demand.

Common Mistakes in IPO Applications

Applying with mismatched bank account. Your ASBA bank must be the same bank linked to your MeroShare/DMAT. If they do not match, your application is rejected.
Insufficient balance. If your bank account does not have enough funds to block at the time of application, it fails. Keep the amount ready before the IPO opens.
Applying after the deadline. IPOs close at a specific time (usually 5:00 PM on the closing date). Late applications are not accepted.
Multiple applications from the same DMAT. You can only apply once per DMAT account per IPO. Duplicate applications are both rejected.

Summary

The IPO process in Nepal follows a clear path: SEBON approves → Issue opens → You apply through MeroShare → Money is blocked (ASBA) → Lottery determines allotment → Shares credited or money unblocked. Your chances of allotment depend on oversubscription ratios, not how many kitta you apply for. Understanding this process helps you apply correctly and set realistic expectations about allotment.