NEA’s IPO

Date (Nepali)

Approx. Gregorian Date

Event & Technical Detail

Significance & Data Point

2041

1984

NEA Act, 2041 enacted. Source

Legal Foundation: Section 5 of the Act establishes the legal basis for public share issuance. Section 28 details governance procedures “after shares worth at least ten percent… have been subscribed by the public,” anticipating a minimum 10% public float.

[Period of Inactivity]

1985-2023

NEA operates as a 100% state-owned monopoly.

The public issuance mandate remains dormant. The government is the sole shareholder, making Section 28’s provisions inactive.

Date (Nepali)

Approx. Gregorian Date

Event & Technical Detail

Significance & Data Point

2080/03/19

July 4, 2023

NEA Board of Directors’ 944th Meeting.

Internal Corporate Approval: The board, under MD Kulman Ghising, formally resolves to issue shares to the public. The decision is to issue up to 20% of the authorized capital as a premium IPO.

2080/08/25

December 11, 2023

NEA Board of Directors Meeting. Source

Proposal Formalization: The board reaffirms its decision and prepares the formal proposal for the Ministry of Energy, Water Resources and Irrigation.

2080/10/06

January 20, 2024

Ministry of Finance provides consent. Source

Key Regulatory Hurdle Cleared: The Ministry of Finance’s consent allows the proposal to advance to the Cabinet for final approval.

2080 Magh 9

January 23, 2024

Government Cabinet Decision. Source

Capital Base Established: Sets NEA’s authorized capital at NPR 300 Billion (≈USD 2.25B). This is a CapEx-driven figure, intended to fund equity in projects like Dudhkoshi, Upper Arun, and critical transmission infrastructure (estimated need: NPR 534 Billion by 2030 Source).

[Ongoing Basis]

FY 2080/81

Financial Performance Valuation.

Premium IPO Justification: The audited Book Value Per Share (BVPS) is calculated at NPR 125.38. This legally justifies a premium issuance under SEBON rules Source, which cap the price at twice the net worth per share. This supports a maximum theoretical issue price of NPR 250.76. The proposed price was NPR 250 per share Source. The plan aimed to raise ~NPR 60 Billion (≈USD 450M).

Date (Nepali)

Approx. Gregorian Date

Event & Technical Detail

Significance & Data Point

~2081 Ashwin

October 2024

Management Discussions.

Formal Postponement: The IPO and convertible bond tracks are officially designated as “off/deferred” in internal management discussions.

2081 Chaitra 11

March 24, 2025

Leadership Change: Government sacks MD Kulman Ghising; appoints Hitendra Dev Shakya. Source

Political Tipping Point: Ghising’s removal, following a conflict over industrial tariff collection Source, signals a reversal of his policies. Shakya’s appointment marks a new strategic direction.

2082 Baishakh

April/May 2025

New Management Issues “White Paper”. Source

Financial Narrative Shift: The new management reframes NEA’s financial status. The Ghising-era net profit of NPR 13.31 Billion (FY 2023/24) is re-stated as a net loss of NPR 5.26 Billion after tax and depreciation adjustments Source. The narrative shifts from “profitable” to a “liquidity crisis” Source. Total assets are reported as NPR 644 Billion Source, with pending liabilities of NPR 44.54 Billion in arrears Source.

2082 Ashad

June/July 2025

New SEBON Policy for Hydropower IPOs. Source

New Regulatory Barrier: SEBON announces a policy requiring hydropower companies to commence electricity generation before issuing an IPO. This invalidates the 2080 plan to use IPO funds for new projects.

2082 Ashad/Shrawan

July 2025

MD Shakya Announces New Debt Plan. Source

Strategic Pivot Formalized: The deferred IPO is replaced with a debt-based strategy. The new plan consists of a short-term loan of NPR 10 Billion and a NPR 20 Billion non-convertible Energy Bond for expansion Source.

2082 Ashoj 23

October 9, 2025

Cabinet Approves NPR 20 Billion Energy Bond. Source

Debt Strategy Cemented: The Cabinet formally approves the issuance of the NPR 20 Billion Energy Bond, definitively prioritizing this non-diluting instrument over the NPR 60 Billion IPO.

Factor

Technical Detail & Data

Impact on IPO Strategy

The Unbundling Prerequisite

Long-standing government policy to unbundle NEA into Generation, Transmission, and Distribution entities Source.

Structural Barrier: An integrated NEA IPO presents an unquantifiable regulatory risk for investors, as the entity is slated for breakup. The integrated IPO is deemed “un-investable” Source and is indefinitely postponed until after restructuring.

The “Production-First” SEBON Rule

New 2082 policy: Hydropower companies can only IPO after commencing production Source.

Renders 2080 Plan Obsolete: The original plan to fund new projects like Upper Arun via an IPO is now illegal under this new rule.

The Viable Path: Generation Company IPO

Model based on the successful precedent of Upper Tamakoshi Hydroelectric Project (UTKHPP) Source.

The Only Compliant Solution: A future IPO of a separated “NEA Generation Company” is the only model that: 

1. Solves the Unbundling Problem: Offers a clean, investable asset. 

2. Complies with SEBON Rule: The company would comprise existing, operational assets. 

3. Solves Dilution Concern: Can replicate the UTKHPP 51/49 ownership model (51% state-controlled entities, 49% public float) Source, preserving state control.