SEBON Proposes New IPO Eligibility Guidelines 2083: Stricter Rules for Companies Seeking Public Issue

Nepal’s securities regulator, the Securities Board of Nepal (SEBON), has published the draft of the “Public Issue General Eligibility Guidelines, 2083” for public consultation, proposing a more structured and risk-based framework for companies seeking to issue shares to the public.

The draft was published on September 17, 2026, and is intended to help ensure that organizations seeking public issue approval meet appropriate financial, governance, disclosure and compliance standards.

The proposed framework covers financial eligibility, corporate governance, promoter and management qualifications, disclosure requirements, due diligence, use of IPO proceeds, post-issue obligations and regulatory monitoring.

Why Is SEBON Proposing New IPO Eligibility Rules?

According to SEBON, the draft aims to ensure the selection of eligible, transparent and sustainable organizations for public issue while strengthening investor protection and promoting financial discipline and transparency in Nepal’s capital market.

The proposed framework also introduces a risk-based approach, allowing regulatory requirements to take into account factors such as the nature of an industry, financial condition, business risk, governance and potential impact on public investors.

Importantly, these are draft provisions currently open for consultation, not final rules. The guidelines would take effect only after approval by SEBON.

Key Proposed IPO Eligibility Requirements

1. Minimum Net Worth Requirement

One of the notable proposed financial requirements is that a company's net worth per share cannot be lower than its face value.

SEBON may also prescribe different minimum net-worth requirements depending on the industry or sector.

This means companies seeking an IPO would face greater scrutiny regarding the quality of their assets and overall financial position.

2. Three Years of Audited Financial Information

Companies applying for a public issue would be required to publicly disclose their audited financial statements for the previous three fiscal years through their own website and the website of the issue and sales manager.

The draft also requires companies to maintain an official website containing information such as annual reports, business prospects and challenges, future plans, board members, the CEO's qualifications and experience, and relevant investment information.

For investors, this could provide more information for evaluating a company's financial history before applying for an IPO.

3. Fit and Proper Test for Promoters, Directors and Management

The draft proposes a Fit and Proper Test for promoters, directors and the chief executive officer of companies seeking public issue approval.

SEBON would assess factors including professional reputation, professional capability, financial discipline and ethical conduct.

The proposal also sets requirements for key management positions, including the CEO, Chief Financial Officer, company secretary and compliance officer, with appropriate qualifications, experience and ethical conduct expected.

4. Stricter Rules Related to Blacklisting

The draft contains restrictions involving blacklisting and serious economic offences.

Among the proposed provisions, an organization or relevant individuals would not qualify where a final court conviction for specified serious financial or economic offences has not been followed by at least three years since completion of the sentence.

It also proposes that a person or entity whose blacklisting has been lifted would remain ineligible if six months have not yet passed since the lifting of the blacklist status.

5. Greater Corporate Governance Requirements

Corporate governance is another major component of the proposed IPO eligibility framework.

Companies seeking public issue approval would be expected to maintain transparent and accountable operating systems, effective internal controls, risk management systems and appropriate investor-protection mechanisms.

The draft also provides for independent directors and board committees covering areas such as audit, risk management, nomination and remuneration, human resources and project management, depending on the circumstances.

6. Stronger Financial Quality Assessment

SEBON would not simply look at reported profit or revenue.

The draft proposes an overall assessment covering:

• Reliability of financial statements
• Quality of income
• Operating cash flow
• Net assets
• Capital structure
• Debt repayment capacity
• Tax compliance
• Financial risk
• Business sustainability

SEBON may also issue additional guidelines, criteria or scoring mechanisms for financial eligibility assessment.

The draft specifically allows scrutiny where there are indications of artificial revenue or profit growth, related-party profit transfers, incorrect classification of assets or liabilities, or misleading accounting practices.

IPO Proceeds Must Be Used for Approved Purposes

Another important proposed provision concerns the use of IPO proceeds.

Under the draft, companies would not be allowed to change an approved use-of-funds plan without prior approval from SEBON. If a modification becomes necessary, the company would have to submit an application with reasons for the proposed change.

Companies would also have to submit quarterly and annual reports regarding the utilization of public issue proceeds.

Such reports would include:

• Amount raised
• Amount spent
• Remaining balance
• Project-wise utilization
• Comparison with the approved plan
• Variances
• Corrective measures

SEBON may also require independent verification of the utilization of IPO proceeds.

If funds are found to have been used for purposes different from those approved, the regulator could direct the company to stop the use of funds, request a corrective action plan, order a special audit or take administrative or legal action under applicable law.

Risk-Based IPO Approval Framework

The proposed guidelines would move toward a risk-based IPO evaluation system.

SEBON could consider:

• Financial risk
• Business risk
• Operational risk
• Legal risk
• Regulatory risk
• Corporate governance risk
• Project implementation risk
• Investor protection risk
• Environmental risk

The regulator may also request additional information, independent expert opinions, special audits, forensic examinations or project-site inspections where necessary.

What Could the Proposed IPO Rules Mean for Investors?

If implemented, the proposed framework could give investors access to more structured information about companies before participating in public issues.

The emphasis on audited financial information, net worth, corporate governance, management qualifications, risk assessment and monitoring of IPO proceeds could make the IPO evaluation process more comprehensive.

However, regulatory eligibility does not mean an IPO is guaranteed to be a profitable investment. Investors should still examine a company's financial statements, valuation, business model, industry outlook, debt position, cash flow and risk factors before making an investment decision.

What Could the Proposed Rules Mean for Companies?

For companies planning an IPO in Nepal, the proposed guidelines could increase the importance of:

• Maintaining strong financial records
• Improving corporate governance
• Establishing effective internal controls
• Maintaining regulatory compliance
• Strengthening risk-management systems
• Providing timely and accurate disclosures
• Demonstrating a clear use-of-proceeds plan
• Ensuring qualified management and directors

Companies with significant governance, financial or compliance weaknesses could face additional scrutiny during the approval process.

SEBON IPO Guidelines 2083: Draft, Not Yet Final

Investors and companies should note that the Public Issue General Eligibility Guidelines, 2083 are currently a draft.

SEBON has published the draft to obtain feedback and suggestions from stakeholders. The regulator's official consultation listing identifies the draft as dated September 17, 2026.

Therefore, specific provisions may change before the final guidelines are approved and implemented.

Learn More About Nepal's Share Market

Understanding IPO eligibility rules is only one part of successful participation in Nepal's stock market. Investors should also understand fundamental analysis, technical analysis, financial statements, valuation, risk management, candlestick patterns, market trends and NEPSE analysis.

For those looking to develop practical knowledge of the Nepalese stock market, Sarbaguna provides resources and share market training in Nepal, including learning materials focused on NEPSE and stock market analysis.

Visit Sarbaguna.com for more information about Nepal share market education and market-related resources.

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Frequently Asked Questions (FAQ)

What is the SEBON IPO Guidelines 2083 draft?

The SEBON IPO Guidelines 2083 draft is a proposed framework establishing general eligibility requirements for organizations seeking to make public issues in Nepal. It covers financial eligibility, corporate governance, management qualifications, disclosure, IPO proceeds and regulatory monitoring.

Is the SEBON Public Issue Guidelines 2083 final?

No. The document currently available is a draft published for public consultation. It may be revised before final approval and implementation.

What is the proposed net worth requirement for an IPO?

The draft states that a company's net worth per share should not be lower than its face value. SEBON may prescribe additional minimum net-worth requirements for specific industries or sectors.

Will companies need three years of financial information?

Under the proposed framework, companies applying for public issue would have to publicly disclose audited financial statements for the previous three fiscal years through their own and relevant issue manager's websites.

What is the Fit and Proper Test in the proposed IPO rules?

The proposed Fit and Proper Test would assess promoters, directors and the CEO based on factors including professional capability, financial discipline, professional reputation and ethical conduct.

Can IPO proceeds be used for purposes other than those approved?

The draft proposes that companies cannot change the approved use-of-funds plan without prior SEBON approval. Companies would also have to report the utilization of public issue proceeds periodically.

Why are these proposed IPO rules important for investors?

The proposed rules focus on financial transparency, corporate governance, disclosure, risk assessment and monitoring of IPO proceeds. These requirements are intended to support a more structured public issue system and investor protection.

Final Takeaway

SEBON's proposed Public Issue General Eligibility Guidelines, 2083 represent a broad framework covering the financial strength, governance, management, disclosure and post-issue responsibilities of companies seeking to raise capital from the public.

The proposed requirements on net worth, three years of audited financial statements, Fit and Proper assessments, blacklisting, corporate governance and IPO fund utilization could significantly shape how public issues are evaluated if they become part of the final regulatory framework.

For investors in Nepal, the development is worth following closely because changes to IPO eligibility criteria can affect the companies entering the primary market and the information available to investors.

This article is based on SEBON's draft document published for consultation. The provisions described above should not be treated as final until the regulatory process is completed.