There has been a record break in the issuance of primary shares in the current fiscal year. In the first 9 months of the current fiscal year, 14 companies broke the record by issuing primary shares worth Rs 13.34 billion.

The number of investors applying for primary shares has also increased significantly this year. The increase in the number of investors buying IPOs this year is also due to the good earnings in a short period of time through the shares of companies that have been issued in the primary market. Madhya Bhotekoshi Hydropower Company broke the record on April 19 after receiving approval from the Nepal Securities Board for IPO.

Prior to this, maximum amount of primary shares were issued in the fiscal year 2072/73. According to the Nepal Securities Board (NSB), 26 companies issued primary shares worth Rs 12.12 billion that year. The Nepal Securities Board (NSB) has stated that there has been a new record break in the issuance of shares in the primary market this fiscal year.

There are still 14 companies in the Nepal Securities Board’s pipeline waiting for permission to issue IPOs. Permission has been sought to issue primary shares worth more than Rs 4.13 billion. The board says that it is preparing to give final approval to some companies.

When the market rises, there is a lot of issuance of primary shares. In the last fiscal year 2072/73, the index had set a new record of 1881 points. The largest primary share issue was in the same year. Similarly, the number of companies issuing primary shares has also reached new heights at a time when the market has reached new heights.

We have plenty of examples of people not subscribing IPOs when the stock market is declining. But in a growing market, investors are rushing in the secondary market to buy shares of companies that have found it difficult to sell their IPOs. Due to which, companies have been putting more emphasis on primary share issue in the year when the market has increased.

In the last year, there was a situation where the underwriters had to accept the non-sale of primary shares and the underwriters of some companies were reluctant to do so. Himal Dolakha Hydropower and Shivashree Hydro Power did not sell all their primary shares. But now that the market has picked up pace, there is no case of sale of shares of any company in the primary share issue. It can be seen that most of the companies are oversubscribed by the investors, applying for more shares than the demand.

With the rise of the stock market, the presence of investors in the primary market is also increasing. According to the Central Depository System (CDSC), the number of DMAT accounts, which was limited to 1.7 million last year, has increased by more than 100 percent to 34.46 million by 21 April, 2021 (Wednesday). It is said that due to the increasing number of investors, the number of applications for the issued primary shares has increased more than the demand.

It can be seen that most of the companies are rushing to issue shares at this time as there are more applications than demand. Due to the growth of the market, most of the companies have started taking the agenda of rights and FPO to the general meeting.