IPO Lock-in Period in NEPSE: What Investors Need to Know

GP Chudal
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ipo-lock-in-period-in-nepse-and-lockin-period-of-companies

IPO Lock-in Period in NEPSE: What Investors Need to Know

When a company goes public, it issues an initial public offering (IPO), which allows it to raise money by selling shares to the public. However, not all shareholders can sell their shares immediately after the IPO. 

Some shareholders, such as corporate executives, directors, major shareholders, promoters, and project-affected locals, are subject to a lock-in period, which restricts them from selling, transferring, or disposing of their shares for a certain duration after the IPO. 

In this article, we will explain what an IPO lock-in period is, why it is important, how it affects the stock price, and what risks investors should be aware of when investing in a company during its IPO lock-in period.
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What is an IPO lock-in period, and how does it work?


An IPO lock-in period is a contractual agreement or a regulatory requirement that prevents certain shareholders from selling their shares for a specified period after the IPO. The main purpose of an IPO lock-in period is to stabilize the market price of the shares and to align the interests of the shareholders with the long-term success of the company.

An IPO lock-in period can vary depending on the company and its IPO details. In Nepal, the lock-in period usually lasts for three years following the IPO allotment to the general public. During this period, the shareholders are not allowed to sell or transfer their shares, except for some valid reasons, such as paying off tax debts or complying with legal obligations.

The IPO lock-in period applies to different sectors and shareholders in Nepal. For sectors such as hydropower, investment, manufacturing and processing, and hotels, which are listed on the Nepal Stock Exchange (NEPSE) only, the lock-in period applies to both the promoters and the project-affected locals who receive a certain percentage of the shares as a reservation. 

For other sectors, such as banking, insurance, finance, microfinance, and development banks, which are also listed on the Securities Board of Nepal (SEBON), the lock-in period applies only to the promoters, as there is no reservation for the locals.

The importance of an IPO lock-in period for maintaining market stability


The IPO lock-in period is intended to maintain market stability and to prevent short-term trading. By restricting the supply of shares in the market, the IPO lock-in period helps to avoid a sudden influx of shares that could cause sharp fluctuations in the stock price. This is especially important for new companies that may be more volatile and have less established track records.

The IPO lock-in period also ensures that the shareholders are committed to the sustained growth and prosperity of the company. By holding their shares for a longer period, the shareholders signal their confidence in the company and its future prospects. This can attract more investors and increase the demand for the shares, which can boost the stock price.

Moreover, the IPO lock-in period allows the company to focus on its core business activities and long-term goals, rather than worrying about the short-term market reactions. The company can also use the IPO proceeds to invest in its expansion, innovation, and development, which can enhance its competitive advantage and profitability.

Understanding the expiration of an IPO lock-up period and its impact on stock prices


When the IPO lock-in period expires, the shareholders who were previously restricted can sell their shares in the market. This can have a significant impact on the stock price, depending on the number of shares sold and the market conditions.

If many shareholders decide to sell their shares after the IPO lock-in period expires, the supply of shares in the market will increase, which can put downward pressure on the stock price. This can happen if the shareholders want to cash out their profits, diversify their portfolio, or reduce their exposure to the company. The shareholders may also have a more accurate and updated insight into the company's performance and outlook, which can influence their decision to sell or hold their shares.

On the other hand, if the shareholders choose to retain their shares after the IPO lock-in period expires, the stock price may increase. This can happen if the shareholders believe that the company has a strong potential and a bright future, and that the current stock price undervalues the company. The shareholders may also want to benefit from the dividends that the company may distribute, depending on its profitability. By holding their shares, the shareholders demonstrate their loyalty and trust in the company, which can attract more investors and increase the demand for the shares.

It is rare for the IPO lock-in period to be extended or shortened, but it can happen under certain circumstances, usually to adjust to the changing market conditions or to meet the shareholders' demands who may need to sell their shares for valid reasons.

Risks associated with investing in a company during its IPO lock-in period


Investors who buy shares of a company during its IPO lock-in period should be aware of the risks and challenges that may arise. One of the main risks is the uncertainty and volatility of the stock price, especially around the expiration of the IPO lock-in period. 

The stock price may fluctuate significantly depending on the supply and demand of the shares, as well as the market sentiment and expectations. Investors should be prepared for the possibility of a sharp decline or increase in the stock price, and have a clear investment strategy and risk tolerance.

Another risk is the lack of liquidity and transparency of the shares. During the IPO lock-in period, the number of shares available in the market is limited, which can make it difficult for investors to buy or sell their shares at their desired price and time. The shares may also have a low trading volume and a high bid-ask spread, which can affect the profitability and efficiency of the transactions. 

Moreover, the information and disclosure of the company may be limited or delayed, which can make it hard for investors to evaluate the company's performance and prospects.

List of Companies from Nepal with their Lock-in Period with Ending Date

Company Name Sector Lock-in Period Ending Date
Aarambha Chautari Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-10-01
Adhikhola Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-08-01
Ajod Insurance Ltd. Insurance 5 years 2025-07-01
Ankhu Khola Jalvidhyut Company Ltd. Hydropower 3 years 2024-06-01
Arambha Microfinance Bittiya Sanstha Ltd. Microfinance 3 years 2024-04-01
Arun Kabeli Power Ltd. Hydropower 3 years 2024-05-01
Asha Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-02-01
Barun Hydropower Co. Ltd. Hydropower 3 years 2024-03-01
Best Power Company Nepal Ltd. Hydropower 3 years 2024-07-01
Bishal Bazar Company Ltd. Trading No lock-in period N/A
Bottlers Nepal (Balaju) Ltd. Manufacturing No lock-in period N/A
Bottlers Nepal (Terai) Ltd. Manufacturing No lock-in period N/A
Butwal Power Company Ltd. Hydropower 3 years 2023-12-01
Chhyangdi Hydropower Ltd. Hydropower 3 years 2024-02-01
Chilime Hydropower Company Ltd. Hydropower 3 years 2023-10-01
Citizen Investment Trust Investment No lock-in period N/A
Citizens Bank International Ltd. Banking 10 years 2026-01-01
Civil Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-09-01
Corporate Development Bank Ltd. Banking 10 years 2026-03-01
Dibyashwori Hydropower Ltd. Hydropower 3 years 2024-04-01
Everest Bank Ltd. Banking 10 years 2026-02-01
Everest Insurance Co. Ltd. Insurance 5 years 2025-06-01
Ghalemdi Hydro Ltd. Hydropower 3 years 2024-06-01
Global IME Bank Ltd. Banking 10 years 2026-04-01
Global IME Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-01-01
Goodwill Finance Co. Ltd. Banking 10 years 2026-05-01
Green Development Bank Ltd. Banking 10 years 2026-06-01
Greenlife Hydropower Ltd. Hydropower 3 years 2024-09-01
Gurans Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-11-01
Gurkhas Finance Ltd. Banking 10 years 2026-07-01
Himal Dolakha Hydropower Company Ltd. Hydropower 3 years 2024-01-01
Himalayan Distillery Ltd. Manufacturing No lock-in period N/A
Himalayan General Insurance Co. Ltd. Insurance 5 years 2025-08-01
Himalayan Power Partner Ltd. Hydropower 3 years 2023-08-01
Himalayan Urja Bikas Company Ltd. Hydropower 3 years 2023-09-01
ICFC Finance Ltd. Banking 10 years 2026-08-01
IME General Insurance Ltd. Insurance 5 years 2025-09-01
Infinity Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2024-12-01
Janaki Finance Ltd. Banking 10 years 2026-09-01
Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-01-01
Joshi Hydropower Development Company Ltd. Hydropower 3 years 2023-07-01
Kalika Power Company Ltd. Hydropower 3 years 2023-06-01
Khanikhola Hydropower Co. Ltd. Hydropower 3 years 2023-05-01
Laxmi Bank Ltd. Banking 10 years 2026-10-01
Laxmi Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-02-01
Liberty Energy Company Ltd. Hydropower 3 years 2023-04-01
Life Insurance Co. Nepal Insurance 5 years 2025-10-01
Mahalaxmi Bikas Bank Ltd. Banking 10 years 2026-11-01
Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-03-01
Mailung Khola Jal Vidhyut Company Ltd. Hydropower 3 years 2023-03-01
Manjushree Finance Ltd. Banking 10 years 2026-12-01
Manushi Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2023-02-01
Mero Microfinance Bittiya Sanstha Ltd. Microfinance 3 years 2025-04-01
Mirmire Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-05-01
Mountain Energy Nepal Ltd. Hydropower 3 years 2023-01-01
Mountain Hydro Nepal Ltd. Hydropower 3 years 2022-12-01
Nabil Bank Ltd. Banking 10 years 2027-01-01
Nabil Equity Fund Investment No lock-in period N/A
Naya Nepal Laghubitta Bikas Bank Ltd. Microfinance 3 years 2025-06-01
Nepal Bangladesh Bank Ltd. Banking 10 years 2027-02-01
Nepal Bank Ltd. Banking 10 years 2027-03-01
Nepal Credit and Commerce Bank Ltd. Banking 10 years 2027-04-01
Nepal Doorsanchar Company Ltd. Telecommunication No lock-in period N/A
Nepal Insurance Co. Ltd. Insurance 5 years 2025-11-01
Nepal Investment Bank Ltd. Banking 10 years 2027-05-01
Nepal Life Insurance Co. Ltd. Insurance 5 years 2025-12-01
Nepal Reinsurance Company Ltd. Insurance 5 years 2026-01-01
Nepal SBI Bank Ltd. Banking 10 years 2027-06-01
Ngadi Group Power Ltd. Hydropower 3 years 2022-11-01
NIC Asia Bank Ltd. Banking 10 years 2027-07-01
NIC Asia Growth Fund Investment No lock-in period N/A
Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-07-01
NLG Insurance Company Ltd. Insurance 5 years 2026-02-01
NMB Bank Ltd. Banking 10 years 2027-08-01
NMB Hybrid Fund L-1 Investment No lock-in period N/A
NMB Sulav Investment Fund-1 Investment No lock-in period N/A
Panchakanya Mai Hydropower Ltd. Hydropower 3 years 2022-10-01
Prabhu Bank Ltd. Banking 10 years 2027-09-01
Prabhu Insurance Ltd. Insurance 5 years 2026-03-01
Premier Insurance Co. Ltd. Insurance 5 years 2026-04-01
Prime Commercial Bank Ltd. Banking 10 years 2027-10-01
Prime Life Insurance Company Ltd. Insurance 5 years 2026-05-01
Progressive Finance Ltd. Banking 10 years 2027-11-01
Radhi Bidyut Company Ltd. Hydropower 3 years 2022-09-01
Rairang Hydropower Development Company Ltd. Hydropower 3 years 2022-08-01
Rastriya Beema Company Ltd. Insurance 5 years 2026-06-01
Rastriya Beema Sansthan Insurance 5 years 2026-07-01
Reliance Finance Ltd. Banking 10 years 2027-12-01
Reliance Life Insurance Ltd. Insurance 5 years 2026-08-01
Ridi Hydropower Development Company Ltd. Hydropower 3 years 2022-06-01
Sagarmatha Insurance Co. Ltd. Insurance 5 years 2026-09-01
Salt Trading Corporation Trading No lock-in period N/A
Samata Gharelu Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-08-01
Samudayik Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2023-02-01
Sanima Bank Ltd. Banking 10 years 2028-01-01
Sanima General Insurance Ltd. Insurance 5 years 2026-10-01
Sanima Mai Hydropower Ltd. Hydropower 3 years 2022-04-01
Shikhar Insurance Co. Ltd. Insurance 5 years 2026-11-01
Shiva Shree Hydropower Ltd. Hydropower 3 years 2022-03-01
Shree Investment Finance Co. Ltd. Banking 10 years 2028-02-01
Siddhartha Bank Ltd. Banking 10 years 2028-03-01
Siddhartha Equity Fund Investment No lock-in period N/A
Siddhartha Insurance Ltd. Insurance 5 years 2026-12-01
Sindhu Bikash Bank Ltd. Banking 10 years 2022-02-01
Soaltee Hotel Ltd. Hotel No lock-in period N/A
Standard Chartered Bank Nepal Ltd. Banking 10 years 2028-04-01
Sunrise Bank Ltd. Banking 10 years 2028-05-01
Sunrise Bluechip Fund Investment No lock-in period N/A
Swabhimaan Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2022-01-01
Swarojgar Laghu Bitta Bikas Bank Ltd. Microfinance 3 years 2025-09-01
Synergy Power Development Ltd. Hydropower 3 years 2021-12-01
Taragaon Regency Hotel Ltd. Hotel No lock-in period N/A
Union Hydropower Ltd. Hydropower 3 years 2021-11-01
United Finance Ltd. Banking 10 years 2028-06-01
United Insurance Co. (Nepal) Ltd. Insurance 5 years 2027-01-01
United Modi Hydropower Ltd. Hydropower 3 years 2021-10-01
Universal Power Company Ltd. Hydropower 3 years 2021-09-01
Upper Tamakoshi Hydropower Ltd. Hydropower 3 years 2021-09-01
Vijaya Laghubitta Bittiya Sanstha Ltd. Microfinance 3 years 2025-10-01
Western Development Bank Ltd. Banking 10 years 2028-07-01

List of Hydropower Companies from Nepal with their Lock-in Period with Ending Date

Company Name Company Code Lock-in End Date
Lock-in Period of Asian Hydropower Limited AHL 2/26/2026
Lock-in Period of Arun Valley Hydropower Development Company Limited AHPC 8/17/2012
Lock-in Period of Ankhukhola Hydropower Company Limited AKJCL 10/28/2021
Lock-in Period of Arun Kabeli Power Limited AKPL 12/22/2019
Lock-in Period of Api Power Company Limited API 11/9/2018
Lock-in Period of Barun Hydropower Company Limited BARUN 5/1/2018
Lock-in Period of Bindhyabasini Hydropower Development Company Limited BHDC 6/17/2025
Lock-in Period of Balephi Hydropower Limited BHL 4/12/2025
Lock-in Period of Barahi Hydropower Public Limited BHPL 12/18/2025
Lock-in Period of Buddha Bhumi Nepal Hydropower Company Limited BNHC 10/8/2024
Lock-in Period of Butwal Power Company Limited BPCL
Lock-in Period of Chilime Hydro power Company Limited CHCL 7/24/2014
Lock-in Period of Chhyangdi Hydropower Company Limited CHL 7/1/2020
Lock-in Period of Dibyashwari Hydropower Company Limited DHPL 8/25/2019
Lock-in Period of Dordi Khola Hydropower Company Limited DORDI 6/22/2025
Lock-in Period of Eastern Hydropower Limited EHPL 11/2/2025
Lock-in Period of Ghalemdi Hydro Limited GHL 4/14/2021
Lock-in Period of Greenlife Hydropower Limited GLH 2/19/2024
Lock-in Period of Green Ventures Limited GVL 4/3/2025
Lock-in Period of Himal Dolakha Hydropower Company Limited HDHPC 8/21/2022
Lock-in Period of Himalayan Hydropower Limited HHL 7/12/2025
Lock-in Period of Himalayan Power Partner Limited HPPL 3/22/2020
Lock-in Period of Himalaya Urja Bikas Company Limited HURJA 4/16/2022
Lock-in Period of Joshi Hydropower Development Company Limited JOSHI 12/11/2021
Lock-in Period of Khani Khola Hydropower Company Limited KKHC 1/26/2019
Lock-in Period of Kalika Power Company Limited KPCL 9/26/2021
Lock-in Period of Liberty Energy Company Limited LEC 7/12/2025
Lock-in Period of Madhya Bhotekoshi Jalavidyut Company Limited MBJC 10/28/2024
Lock-in Period of Mountain Energy Nepal Limited MEN 12/3/2023
Lock-in Period of Molung Hydropower Company Limited MHCL
Lock-in Period of Mandakini Hydropower Limited MHL 8/1/2025
Lock-in Period of Mountain Hydro Nepal Limited MHNL 3/17/2022
Lock-in Period of Maya Khola Hydropower Company Limited MKHC 10/26/2082
Lock-in Period of Mailung Khola Jal Vidhyut Company Limited MKJC 8/24/2024
Lock-in Period of Ngadi Group Power Limited NGPL 5/26/2019
Lock-in Period of Nepal Hydro Developer Limited NHDL 9/15/2020
Lock-in Period of National Hydro Power Company Limited NHPC
Lock-in Period of Nyadi Hydropower Limited NYADI 10/21/2024
Lock-in Period of Peoples Hydropower Company Limited PHCL 11/22/2025
Lock-in Period of Panchakanya Mai Hydropower Limited PMHPL 7/26/2021
Lock-in Period of Panchthar Power Company Limited PPCL 3/7/2022
Lock-in Period of People’s Power Limited PPL 9/28/2025
Lock-in Period of Radhi Bidyut Company Limited RADHI 1/16/2021
Lock-in Period of River Falls Power Limited RFPL 5/22/2025
Lock-in Period of Rapti Hydro & General Construction Limited RHGCL 7/24/2025
Lock-in Period of Rasuwagadhi Hydropower Company Limited RHPL 3/31/2021
Lock-in Period of Ridi Power Company Limited RIDI
Lock-in Period of Ru Ru Jalbidhyut Pariyojana Limited RURU 4/15/2024
Lock-in Period of Sahas Urja Limited SAHAS 10/3/2024
Lock-in Period of Swet-Ganga Hydropower & Construction Limited SGHC 8/3/2025
Lock-in Period of Singati Hydro Energy Limited SHEL 4/9/2024
Lock-in Period of Sanima Mai Hydropower Limited SHPC 10/31/2016
Lock-in Period of Sikles Hydropower Limited SIKLES 9/25/2025
Lock-in Period of Sanjen Jalavidhyut Company Limited SJCL 3/31/2021
Lock-in Period of Supermai Hydropower Limited SMH
Lock-in Period of Super Madi Hydropower Limited SMHL
Lock-in Period of Sagarmatha Jalbidhyut Company Limited SMJC
Lock-in Period of Samling Power Company Limited SPC 11/1/2024
Lock-in Period of Synergy Power Development Limited SPDL 2/17/2020
Lock-in Period of Sayapatri Hydropower Limited SPHL 8/13/2025
Lock-in Period of Shuvam Power Limited SPL
Lock-in Period of Shiva Shree Hydropower Limited SSHL 12/10/2022
Lock-in Period of Sanima Middle Tamor Hydropower Limited TAMOR
Lock-in Period of Terhathum Power Company Limited TPC 9/10/2024
Lock-in Period of Upper Hewakhola Hydropower Company Limited UHEWA 7/16/2025
Lock-in Period of United Modi Hydropower Limited UMHL 10/6/2019
Lock-in Period of United Idi-Mardi and R.B. Hydropower Limited UMRH 11/30/2023
Lock-in Period of Union Hydropower Limited UNHPL 5/2/2022
Lock-in Period of Universal Power Company Limited UPCL 2/27/2022
Lock-in Period of Upper Tamakoshi Hydropower Limited UPPER 11/27/2021
Lock-in Period of Upper Solu Hydro Electric Company Limited USHEC 7/14/2025

Conclusions:

The IPO lock-in period is a common practice in the Nepalese capital market, which affects the shareholders and investors of the companies that go public. The IPO lock-in period has both advantages and disadvantages, depending on the perspective and objectives of the stakeholders. 

The IPO lock-in period can help to stabilize the market price of the shares, align the interests of the shareholders with the long-term success of the company, and allow the company to focus on its core business activities and goals. However, the IPO lock-in period can also create uncertainty and volatility in the stock price, limit the liquidity and transparency of the shares, and pose various risks and challenges for the investors. 

Therefore, investors should be well-informed and cautious when investing in a company during its IPO lock-in period, and have a clear understanding of the company's fundamentals, potential, and future plans.
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