A nation does not become prosperous merely by collecting taxes or building roads. It becomes prosperous when it creates a system capable of turning the savings of ordinary citizens into industries, infrastructure, energy, and long-term national wealth. That is the true role of capital markets. In Nepal, this responsibility rests largely with the Securities Board of Nepal, commonly known as SEBON, and the Nepal Stock Exchange, known as NEPSE, institutions that together form one of the most important pillars of Nepal’s economic future.
The idea behind the modern capital market was revolutionary because it allowed nations to transform the small savings of ordinary citizens into the large-scale capital needed for industries, infrastructure, energy, and innovation. In 1602, the Dutch East India Company launched what is widely regarded as the world’s first modern Initial Public Offering, allowing the public to collectively finance expensive and risky global trade voyages in exchange for shared ownership and profits. Over time, capital markets evolved into one of the central engines of modern industrial economies by mobilizing idle savings, distributing investment risk, and financing long term economic expansion. Today, U.S. equity markets exceed 60 trillion U.S. dollars in value, while India’s capital markets, led by the Bombay Stock Exchange established in 1875, now exceed 5 trillion U.S. dollars. Nepal entered this journey much later and at a far smaller scale. Public share participation began with the Biratnagar Jute Mill in 1937, while Nepal’s modern securities framework formally emerged after the establishment of the Securities Board of Nepal in 1993. Today, Nepal’s market capitalization fluctuates around NPR 4 to 4.5 trillion, roughly 30 to 33 billion U.S. dollars, illustrating both the progress achieved and the enormous room still remaining for future capital formation.
In Nepal, IPOs are not merely financial events for company promoters. They have become an essential mechanism for national development. Many industries eventually reach a point where expensive bank financing begins to constrain profitability and expansion. By going public, companies are able to reduce debt burdens, improve cash flow, and raise long term growth capital for industrial expansion. The importance of public capital becomes even greater in the hydropower sector, where projects often exhaust promoter investments and bank financing before construction is completed. Nepal’s banking system alone is frequently unable to sustain the long gestation periods and massive capital requirements associated with large infrastructure and energy projects. IPO financing therefore becomes critical for completing projects, mobilizing domestic savings, and converting Nepal’s vast hydropower potential into productive national assets. For a country with estimated hydropower potential exceeding eighty thousand megawatts, the strength and efficiency of capital markets are directly linked to the pace of national development itself.
Today, Nepal’s capital market is facing the consequences of repeated leadership instability and the government’s failure to treat capital formation as a serious national priority. During the period of stable leadership under former SEBON Chairman Ramesh Kumar Hamal between February 2022 and January 2024, Nepal experienced one of its strongest periods of IPO approvals and public capital mobilization. In Fiscal Year 2078/79 (2021–2022), SEBON approved 28 IPOs raising approximately NPR 7.2 billion, or about 54 million U.S. dollars, followed by 42 IPOs in Fiscal Year 2079/80 (2022–2023), raising nearly NPR 22.38 billion, or roughly 170 million U.S. dollars. However, after his departure, the chairperson position remained vacant for nearly eleven months, creating regulatory uncertainty and significantly slowing the pace of approvals and capital mobilization. In Fiscal Year 2080/81 (2023–2024), only 9 IPOs were approved, followed by just 15 IPOs in Fiscal Year 2081/82 (2024–2025), while SEBON’s approval pipeline reportedly accumulated proposed public issues exceeding NPR 66 billion, or nearly half a billion U.S. dollars. This was not merely a bureaucratic delay. It represented trapped domestic capital, delayed hydropower generation, postponed industrial expansion, rising Interest During Construction costs, weakened investor confidence, and slower economic activity across the country. In a nation urgently seeking investment and infrastructure development, leaving the capital market regulator without stable leadership for extended periods reflects profound institutional irresponsibility with serious national economic consequences.
Capital formation through securities markets remains one of Nepal’s most strategically important yet underdeveloped economic tools. Over the last five fiscal years alone, SEBON approved IPOs that collectively mobilized more than NPR 53 billion, roughly 400 million U.S. dollars, in long term public investment capital. Unlike bank loans, which impose immediate repayment obligations and high financing costs, equity capital raised through public markets allows industries and infrastructure projects to absorb longer construction periods and operational risks. This distinction is particularly important in sectors such as hydropower and large scale industrial development, where projects often require years before generating stable revenue. Nepal’s economy today remains heavily dependent on remittances exceeding 11 billion U.S. dollars annually, yet much of this inflow continues to support consumption, imports, land speculation, and real estate rather than productive industrial investment. At the same time, Nepal still lacks deep corporate bond markets, pension driven investment systems, and mature venture capital ecosystems capable of financing large scale economic transformation. This leaves the securities market as one of the country’s few viable mechanisms for converting domestic savings into productive national assets. A weak or unstable capital market therefore does not merely slow financial activity. It slows the nation’s transition from a remittance dependent economy into a productive industrial economy.
The responsibility before policymakers is therefore urgent and far greater than a routine bureaucratic appointment. Regulatory institutions cannot be allowed to drift into paralysis due to political bargaining, corruption, bureaucratic complacency, or institutional cultures where public responsibility is treated casually. When professionals entrusted with critical economic responsibilities fail to act with competence and urgency, the cost is ultimately borne by the entire nation through delayed infrastructure, weakened investor confidence, rising financing costs, and slower economic growth. There should be zero tolerance for corruption, chronic indecision, politically motivated interference, or institutional negligence within agencies responsible for capital formation. In a country that urgently requires investment and industrial expansion, the appointment of the currently vacant SEBON chairperson position should be treated as one of the government’s highest economic priorities. This position cannot become a political reward or administrative compromise. Nepal requires a professionally competent, independent, and decisive leader who understands that every delay in restoring confidence and efficiency within the capital market system directly weakens the nation’s broader economic future.