NEPSE’s New Pricing Rule Draws Objection from Reliance Spinning Mills

The Nepal Stock Exchange (NEPSE) has revised its price determination mechanism, deciding that the opening price range of newly listed shares will now be based on par value rather than net worth. The change applies to the price band set for the first day of trading after a company is listed.

Earlier, NEPSE fixed the opening range at up to three times a company’s net worth per share. Its board meeting held earlier this month decided that for companies with positive net worth, the opening range would instead be determined by the face value of shares. 

The revised policy, however, has yet to be formally published on NEPSE’s website.

Following the change, shares of Reliance Spinning Mills Limited (RSML) and Salapa Bikas Bank Limited (SALAPA) were listed on February 13. NEPSE set the opening price band for both companies at Rs100 to Rs300.

SALAPA had allotted its initial public offering (IPO) shares on December 30, while RSML completed allotment on January 2. A total of 5.223 million SALAPA shares and 19 million RSML shares were listed on the exchange.

RSML, which issued its IPO through the book-building method, has expressed dissatisfaction with the exchange’s pricing decision, arguing that modern book-building requires a different valuation approach than traditional IPO pricing. The company said the move could weaken investor confidence, noting that qualified institutional investors had bid as high as Rs 912 per share during the IPO process. According to RSML, the Rs300 upper limit does not reflect its market value.

The company reported a net worth of Rs 490.54 per share as of the second quarter of the current fiscal year 2025/26, which it says supports a valuation closer to the institutional bid price.

RSML had received approval to issue 1.926 million IPO shares worth Rs 192.66 million, representing 10.14 percent of its paid-up capital of Rs 1.90 billion.

Securities Board of Nepal (SEBON), the capital market regulator, had approved a public offering price of Rs 820.80 per share, set at a 10 percent discount to the Rs 912 bid submitted by institutional investors. The company allocated 40 percent of shares to qualified institutional investors and 60 percent to the general public.

Of the total shares, 770,640 were allotted to institutional investors, 115,596 to Nepalis working abroad, 57,798 to mutual funds, 57,798 to employees, and 924,768 to the general public. Shares were allotted on January 29, 2026, while 10 percent of the public portion had already been distributed to Nepalis working abroad on December 16, 2025.

After listing, only the shares issued to the general public and Nepalis working abroad will be tradable from Monday, February 16. Mutual fund shares will remain locked in for six months from the allotment date, while promoter and employee shares will be locked in for three years.

As of the second quarter of the current fiscal year, RSML reported a net profit exceeding Rs 137.4 million and operating income of over Rs 4.79 billion.