After the long discussions of how to bring real sector industries into Securities market, SEBON is now preparing the model for pricing the IPO freely. The initiative is taken primarily to motivate and encourage real sector companies to go public by allowing them the liberty to price their own shares rather than the fixed price of Rs. 100 per unit.
The new budget prepared under PM KP Oli had specified a 15% tax holiday for the manufacturing companies who are entering the securities market. However, the companies with goodwill and handsome profit were reluctant to sell their ownership at Rs. 100 per share. And accordingly the model for free pricing of the initial public offering (IPO) was conjured. Like in FPO pricing model, the new IPO pricing will also be done under justifiable parameters, which the SEBON is working on right now.
According to the latest amendments in Company act, Telecommunications Company with more than 10 crore in paid-up capital are required to get listed within 2 years. This and the new pricing model is expected to open up ways for big companies to enter Securities market. This can be beneficial in two ways: 1. the investors can now create a more diversified portfolio, which previously was heavily dominated by Banks and Financial institutions 2. The NEPSE index can be a better indicator of our economy as currently it doesn’t reveal much about our manufacturing and production sector.
