Will Nepse privatise ?
Nepal Stock Exchange (Nepse) has said that it is going to public to raise its paid up capital.
Currently, it has a paid up capital of Rs 300 million only and after the planned issue – most probably the further issue – the capital will be raised to Rs 500 million, said the Nepse that is seeking Finance Ministry's green signal.
It is soon start demutualisation – after the ministry's approval – according to the officials of secondary market. Demutualisation is a global practice to convert a stock exchange into a publicly traded company.
The Nepse is planning to conduct a Due Diligence Audit (DDA) to evaluate its financial position before starting the process of conversion of a mutual organisation to a public corporation. The DDA will help Nepse fix issue price.
Currently, Nepse has Rs 300 million paid-up capital and it plans to raise it to Rs 500 million.
Though the modality of demutualisation will be finalised after the Due Diligence Audit, one of the option could be Further Public Offering.
But the Nepse needs to be privatised to materialise its plan. The government, in the budget for the fiscal year 2007-08 had also promised to divest government shares in Nepse and bring in the private sector but the plan is still in the paper as neither Nepse nor the government walked the talk.
Last year, two foreign stock exchange companies – Korea Exchange and Singapore Exchange – had expressed their interests to become strategic partner with Nepse. The Korea Exchange had sought a 10 per cent stake in the Nepse.