As per the latest amendment to Company Act 2007, telecommunication companies with a capital investment of more than Rs 50 million are now required to go public. The rule states that all the telecommunication companies and Internet Service Providers (ISPs) should issue public shares within the next two years.
Currently, there are six telecom companies operating in Nepal – Nepal Telecom, Ncell, United Telecom, STM Telecom, Smart Telecom and Nepal Satellite – out of which only Nepal Telecom has issued shares to the public.
The amendment made last Tuesday has already been endorsed by the Legislature-Parliament and endorsed by the President.
The Act also mentions that the companies with more than 49 shareholders are required to go public.
The Act is expected to increase the size of the stock market. Currently, there 221 companies listed in Nepal Stock Exchange, which includes different banks and financial institutions.
A spokesperson for Securities Board of Nepal (Sebon), Niraj Giri praised the amendment made and said, “The law could encourage private companies to offer shares at the time when they are reluctant to go public.”
Edited by – Awale Sushil