16 Chait, Kathmandu. The Nepal Securities Board has proposed a separate policy regime for small and medium companies to issue IPOs and share trading. The board has proposed to classify companies with a maximum paid-up capital of Rs 25 crore as small and medium companies (SMEs).
The board, which is preparing to bring a separate SME platform for securities transactions for small and medium companies, has proposed this by publishing the draft Regulation 2079 related to securities issuance and transactions of these companies.
As per this regulation, the paid-up capital of the organization registering the securities with the BMOZIM Board should be a maximum of Rs 25 million. But the Board will be competent to modify the paid-up capital limit keeping in view the presence of small and medium-sized organizations and market conditions’, the proposed draft said.
Thus, it has been proposed in the regulations that a company making a public issue should issue securities in such a manner that it shall not be less than 30 per cent and not more than 49 per cent of the issued capital of the organisation, except in cases where the regulatory body Belonging to the organization specifies otherwise. Thus, it has been proposed that a company which is going for public liquidation should have completed one year from the commencement of business.
However, in the draft proposed by the Board, it has been mentioned that if the company registered as a private company has completed 2 financial years, then the company converted into a public company need not give details of one financial year of business.
Similarly, as per the proposed regulations, the board also said that rating is not mandatory for companies going public. However, if the Nepal Securities Board considers it necessary, draft regulations have been prepared to direct such organized entities to get their ratings done through credit rating organizations prior to public issue of securities.
Minimum 250 shares at the time of filing IPO
In the regulations relating to the issue of securities and the business of small and medium-sized organizations proposed, it is proposed that the applicant should apply for the purchase of at least 250 shares of the shares to be issued.
However, the board said that when the application is requested in this way, not more than 50 percent of the face value of the shares is requested along with the application. An amount not exceeding one percent, states the proposed rules. Should be be requested. But as per the special law, if there is a provision to demand 100% of the amount, or the organized organization in operation publishes its balance sheet for the last three years and collects the capital, the board can request an amount more than 50% . ,
Such companies can also issue IPOs at a premium price. It is proposed that the organization is operating in net profit for the last three consecutive years, and the net worth per share should be more than the paid-up capital per share of the organization. Similarly, it is proposed that the General Meeting of the Organization has decided to issue the securities at a premium price, having obtained a credit rating grade of at least average or higher, and determine the issue price, as per the last audited financial statement Can go up to double the net worth per share.