Nepal’s Share Market Reaches 8.1 Million Demat Accounts, But 56% Are Still Outside the Secondary Market

Nepal’s capital market has expanded significantly in recent years, with more than 8.09 million Demat accounts now registered across the country. However, new data presented by the Securities Board of Nepal (SEBON) to the parliamentary Finance Committee reveals an important gap: a large majority of Demat account holders have yet to participate in Nepal’s secondary share market.

According to the latest figures, 8.095 million Demat accounts had been opened by Ashwin 13, 2083, while only 3.562 million broker trading accounts were recorded by the end of fiscal year 2082/83.

This means that only around 44% of Demat account holders had broker accounts for buying and selling shares in the secondary market, while approximately 56% remained outside active secondary-market trading.

The figures provide an important insight into the changing structure of Nepal’s stock market and highlight both the tremendous growth of investor participation and the need for greater investor education.

8.09 Million Demat Accounts: Nepal’s Investor Base Continues to Grow

Nepal’s population was recorded at approximately 29.16 million according to the 2078 national census. Against this population base, the country’s 8.095 million Demat accounts represent roughly 27.75% of the population.

The rapid growth of Demat accounts demonstrates that the Nepal share market has moved far beyond being a niche investment destination.

However, having a Demat account does not necessarily mean that an investor actively participates in the secondary market.

Many investors open Demat and MeroShare accounts primarily to apply for IPOs. After receiving shares through an initial public offering, some investors remain inactive rather than developing a broader understanding of secondary-market investing, fundamental analysis and technical analysis.

56% of Demat Holders Have Not Entered the Secondary Market

The most significant finding from the SEBON data is the difference between Demat accounts and broker trading accounts.

Only around 35.62 lakh investors had broker accounts compared with 80.95 lakh Demat accounts.

Therefore, approximately 45.33 lakh Demat account holders had not opened broker trading accounts, representing around 56% of total Demat accounts.

This shows that Nepal has successfully expanded access to the capital market, but active participation in the secondary market remains considerably lower.

MeroShare Users Also Show a Significant Gap

The number of MeroShare accounts stood at approximately 51.22 lakh.

Compared with 35.62 lakh broker accounts, around 15.60 lakh MeroShare users had not yet opened a broker trading account.

This suggests that millions of Nepalese investors are familiar with the primary market and IPO application process but have not yet become regular participants in the secondary market.

For the Nepal stock market to become deeper and more mature, investor education will be increasingly important.

Investors need to understand not only how to apply for an IPO but also how to evaluate companies, read financial statements, manage risk, analyze NEPSE trends and make disciplined investment decisions.

Ordinary Shares Account for 46.26% of Capital Raised

Another important development is the increasing diversification of financial instruments in Nepal’s primary capital market.

According to the data presented by SEBON, ordinary shares accounted for 46.26% of total capital mobilized through the primary market.

Institutional debentures accounted for 31.03%, while mutual funds represented 14.81%.

Specialized investment funds, including private equity and venture capital funds, accounted for 5.17%, while preference shares represented 2.17%.

The growing share of debt securities and investment funds indicates that Nepal’s capital market is gradually developing beyond a traditional IPO-focused structure.

Rs. 79.73 Billion Capital Mobilized in FY 2082/83

Nepal’s capital market also continues to play an important role in corporate financing.

During fiscal year 2082/83, approval was granted to 52 institutions to mobilize approximately Rs. 79.73 billion through shares, debentures and rights shares.

In the first quarter of fiscal year 2083/84, four institutions had already received approval to mobilize approximately Rs. 4.60 billion.

This demonstrates the increasing importance of the securities market as an alternative source of long-term capital for Nepalese businesses.

Private Equity and Venture Capital Are Expanding

Specialized investment funds are becoming another important component of Nepal’s financial ecosystem.

SEBON data indicates that 20 specialized investment funds have received approval to mobilize approximately Rs. 48.25 billion.

The growth of private equity and venture capital could help Nepalese businesses access funding beyond traditional bank loans.

Such funds can potentially support businesses, infrastructure, technology companies and productive industries while increasing the institutional depth of Nepal’s capital market.

Nepal Stock Market Capitalization Reaches Rs. 44.78 Trillion

As of Ashwin 13, the NEPSE index stood at 2,603.71 points, while total market capitalization reached approximately Rs. 44.78 trillion.

Compared with Nepal’s reported GDP of around Rs. 67 trillion, the stock market capitalization was equivalent to approximately 66.84% of GDP.

This highlights the growing economic significance of the Nepal Stock Exchange and the capital market.

The increasing market capitalization also means that changes in stock-market conditions can have a meaningful impact on household wealth, corporate financing and investor sentiment.

Capital Market Generates Billions in Government Revenue

Nepal’s capital market is also contributing substantially to government revenue.

During fiscal year 2082/83, the government collected approximately Rs. 15.61 billion from capital gains tax and other capital-market-related fees.

During the first two months of the current fiscal year, approximately Rs. 1.54 billion had already been collected.

This makes the capital market an increasingly important source of non-customs government revenue.

SEBON Plans Further Capital Market Reforms

Despite the rapid growth in investor numbers and market capitalization, SEBON has acknowledged several structural and technological challenges.

Issues involving trading-system reliability, cybersecurity, governance and institutional weaknesses have highlighted the need for modernization of Nepal’s capital-market infrastructure.

SEBON has reportedly been working on multiple policy drafts and regulatory reforms.

The broker industry is also being considered for classification into four categories as part of efforts to promote institutionalization and expand services.

Similarly, a number of regulations concerning NEPSE’s trading system, order management and governance are reportedly being prepared.

Intraday Trading, Short Selling and Derivatives Could Transform NEPSE

One of the most important areas of future development is the modernization of trading infrastructure.

Plans have been discussed to develop CDSC into a Central Counterparty (CCP) infrastructure and create the foundation required for advanced market products such as:

• Intraday trading
• Short selling
• Derivatives
• Advanced order-management systems
• Improved settlement infrastructure
• Stronger risk-management mechanisms

If implemented effectively, these reforms could significantly increase the depth and sophistication of Nepal’s capital market.

Why Investor Education Is Becoming More Important

The difference between 8.09 million Demat accounts and 3.56 million broker accounts reveals an important challenge.

Nepal has succeeded in bringing millions of citizens into the capital-market ecosystem, but the next stage is to improve the quality of participation.

Investors should understand:

• How the NEPSE stock market works
• Fundamental analysis
• Technical analysis
• Company financial statements
• EPS, P/E and book value
• Support and resistance
• Risk management
• Portfolio management
• Trading psychology
• IPO and FPO investing
• Rights shares and bonus shares
• Debentures and mutual funds
• Secondary-market trading
• Intraday and short-selling concepts

For investors who want structured education, Sarbaguna provides resources covering the Nepal share market and trading education, including its Share Market Training in Nepal and Investment Training and Stock Market Analysis.

Investors interested in global financial markets can also explore Sarbaguna’s Forex Trading Course in Nepal.

What Does This Mean for Nepalese Investors?

The latest SEBON data presents a mixed picture.

On one hand, Nepal’s capital market has reached a historic level of participation, with more than eight million Demat accounts and a market capitalization of nearly Rs. 45 trillion.

On the other hand, more than half of Demat holders have not yet entered the secondary market.

The future growth of Nepal’s stock market will therefore depend not only on increasing the number of investors but also on improving investor knowledge, market infrastructure, transparency, technology and regulatory efficiency.

For new investors, opening a Demat account is only the beginning. Understanding the market before committing significant capital is equally important.

Conclusion

Nepal’s capital market is entering a new phase.

The country now has a massive investor base, diversified financial instruments, growing institutional investment and a stock market whose capitalization is equivalent to a significant portion of national GDP.

However, the gap between Demat ownership and active secondary-market participation remains substantial.

With approximately 45 lakh Demat holders still outside the secondary market, investor education and financial literacy could become one of the most important drivers of the next stage of Nepal’s capital-market development.

As NEPSE moves toward improved technology, stronger regulation and potentially advanced products such as short selling, intraday trading and derivatives, informed and disciplined investors will be better positioned to understand both opportunities and risks.

Frequently Asked Questions (FAQ)

1. How many Demat accounts are there in Nepal?

According to the latest SEBON data presented to the parliamentary Finance Committee, Nepal had approximately 80.95 lakh Demat accounts as of Ashwin 13, 2083.

2. How many Nepalese investors have broker trading accounts?

The number of broker trading accounts stood at approximately 35.62 lakh by the end of fiscal year 2082/83.

3. What percentage of Demat holders participate in the secondary market?

Approximately 44% of Demat account holders had broker trading accounts based on the cited figures, meaning roughly 56% had not entered the secondary market.

4. How many MeroShare accounts are there in Nepal?

The cited SEBON data shows approximately 51.22 lakh MeroShare accounts.

5. What is the market capitalization of Nepal’s stock market?

As of Ashwin 13, the NEPSE market capitalization was approximately Rs. 44.78 trillion, while the NEPSE index stood at 2,603.71 points.

6. Is Nepal’s stock market only an ordinary-share market?

No. The primary market increasingly includes ordinary shares, debentures, mutual funds, specialized investment funds and preference shares. Ordinary shares accounted for 46.26% of capital mobilized in the cited data.

7. Why is stock market education important in Nepal?

Stock market education can help investors understand fundamental analysis, technical analysis, risk management, portfolio construction, trading psychology and market cycles before making investment decisions.

8. Where can I learn about the Nepal share market?

Sarbaguna offers structured resources for investors interested in Nepal’s stock market, including Share Market Training in Nepal and complete stock-market learning.

9. Does Sarbaguna provide Forex trading education?

Yes. Sarbaguna provides a Forex Trading Course in Nepal covering concepts relevant to learning and understanding the global foreign-exchange market. Visit the Professional Forex Trading Course in Nepal page for more information.

10. How can I contact Deep Thapa for trading and investment education?

For information about Sarbaguna's stock-market and Forex education services, contact Deep Thapa on WhatsApp at 9849290806.

For professional guidance and market education, contact Deep Thapa – WhatsApp: 9849290806.

Disclaimer: This article is for educational and informational purposes only and should not be considered financial or investment advice. Investors should conduct their own research and assess risk before making investment decisions.