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The much-talked-about initial public offering (IPO) of companies through the book building mechanism is expected to move ahead with the Securities Board of Nepal (Sebon) assuring that the preparations will be completed within the next two months. The IPO through the book-building mechanism has been stalled for almost two years ever since the controversy related to Sarbottam Cement Limited surfaced in July 2021. The planned IPO of Sarbottam Cement was mired in controversy for the alleged involvement of then chairman of Sebon Bhisma Raj Dhungana and then CEO of Nepal Stock Exchange (Nepse) Chandra Singh Saud in insider trading. It was found that Dhungana’s daughter Rebika Dhungana and Saud’s wife Sushila Kumari Bohora each had purchased 11,911 shares of Sarbottam Cement at a far lower price, even before the company's planned IPO under the book-building mechanism. Following the controversy, Sebon Chairman Dhungana was sacked by the government while Nepse CEO resigned from his post. Now, Sebon has said that it is ready to finalize the IPO mechanism under the book building method within two months. The board has recently given instructions to hold a meeting with Nepse and companies planning to issue IPO under book building, merchant bankers who are in charge of issuing shares, qualified institutional investors, and make necessary preparations. Book building is the process by which an underwriter attempts to determine the price at which the IPO of a company is offered. An underwriter, normally an investment bank, builds a book by inviting institutional investors (such as fund managers and others) to submit bids for the number of shares and the price(s) they would be willing to pay for them. According to Sebon Chairman Ramesh Kumar Hamal, necessary discussions have been held with the stakeholders concerned to finalize the process. "We have asked everyone to complete the work to be done on their part in one and a half months," he said, " The board will finalize it within two months." The board issued guidelines related to book building in 2017. According to Sebon, there are some issues related to merchant banks and credit rating agencies. Hamal said the board has taken the necessary decisions to resolve the issues. The board has also instructed the companies that have planned their IPOs through the book-building IPO to adjust the previously determined share price. Sarbottam Cement and Reliance Spinning Mills had earlier applied at Sebon seeking permission to issue IPOs through book-building. Sarbottam has fixed a maximum price of Rs 751.50 per share while Reliance Spinning Mills has fixed a maximum price of Rs 912 per share. According to Sebon, Sarbottam has sought to issue 2.4 million shares at the price range of Rs 501-751.50. And, Reliance Spinning Mills has asked Sebon permission to issue 770,640 shares at the price range of Rs 608-912. As the regulator of the capital market, Sebon needs to make an evaluation of investor demand and give its okay to set the issue price before the company can float shares to the general public. As the price was determined more than eight months ago and the stock market has fallen significantly since then, the board has asked the companies including Sarbottam that are looking to issue shares through the book building method to adjust the share prices. Similarly, the board has instructed Nepse to proceed with the preparation of inviting tenders for the IPO sales through book building. The merchant bankers based on the Nepse tender should initiate the IPO issuance process.  

Nepal’s gross domestic product (GDP) growth is projected to slow largely due to tight monetary policy, slackened domestic demand, the unwinding of the Covid-19 stimulus, and persistent global headwinds. Asian Development Bank (ADB) on Tuesday said that the country's growth is expected to decelerate to 4.1 percent in 2023. In September last year, the Manila-based agency had expected Nepal's economy to grow by 4.7 percent this year. According to ADB, agriculture growth will likely moderate to 2.0 percent in 2023. "There has been an increase in paddy output, but winter rainfall has been scanty and will likely affect winter crop yield and overall agriculture output," states the Asian Development Outlook (ADO) April 2023 report. The manufacturing sector growth will likely decelerate due to higher interest rates, import restriction measures, and the slowdown in domestic consumption. A dampened external demand has affected manufacturing and construction subsectors. The ADB has projected that the industry sector's growth will likely decelerate by half, from 10.2 percent to 5.1 percent in 2023. "The key areas of the economy have contracted, notably construction and manufacturing," reads the report. Services growth will also moderate to 4.4 percent in 2023 from 5.9 percent in FY2022. Credit control measures and a hike in interest rates have slowed down real estate, wholesale, and retail trade activities. While tourism growth has been strong, international tourist arrivals are still at half of the pre-pandemic level. The ADB outlook has projected inflation to be on the higher side. Despite the monetary tightening, the country's inflation will edge up to 7.4 percent in 2023 from 6.3 percent in 2022. According to ADB, the current account deficit (CAD) is estimated to narrow to 4 percent of GDP due to a declining trade deficit amidst buoyant remittance inflows. ADB has expected inflation to decelerate to 6.2 percent in 2024 assuming a normal harvest, subdued oil prices, and a decline in inflation in India. CAD is expected to further moderate to 3.9 percent of GDP in 2024 as global commodity prices normalize and fossil fuel imports are partially replaced with increased domestic hydroelectricity output. ADB said that growth in private consumption expenditure will slow, and public investment may grow marginally in 2023. Public investment, having contracted by 6.0 percent in 2022, is expected to expand only marginally by 1.3 percent in 2023. After rising by 5.4 percent in 2022, growth in private consumption expenditure will decelerate to 3.7 percent in 2023, dampened by higher prices and credit controls. Public sector consumption is anticipated to expand by 3.6 percent in 2023, largely on election spending by provinces and the federal government. However, the growth in private investment expenditure will slow from 8.8 percent in 2022 to 4 percent in 2023, tamped down by higher policy rates, import restrictions, and cash margin requirements for imports (both have already been lifted). “There are downside risks to the outlook such as a global downturn hitting Nepal’s tourism and remittance receipts,” said ADB Country Director for Nepal Arnaud Cauchois. “Accelerating capital budget spending through focused investment planning, financial management, and project readiness will help spur Nepal’s economic growth over the years.”  

The Chinese smartphone brand Xiaomi has launched Redmi Note 12 and Redmi Note 12 Pro 5G in the Nepali market. According to Xiaomi Nepal, equipped with a Snapdragon685 mobile platform, the Redmi Note 12 provides a seamless and efficient multitasking experience in photography, gaming, audio, and streaming. Whereas Redmi 12 Pro 5G is powered by the Mediatek Dimensity 1080 processor which delivers impressive reliable performance for content creation, gaming, and 5G connectivity. The Redmi Note12 Pro 5G comes with a powerful 5,000mAh battery allowing the users extended use without worrying about running out of charge. The Redmi Note12 Pro 5G also features flagship 67 Turbocharging that charges the phone in 15 minutes. Similarly, the RedmiNote 12 has a 5,000mAh battery. The Redmi Note 12 has a flat frame and back design. The phone is available in three color variants: onyx gray, ice blue, and mint green. It features a 6.67-inch Full HD+ Super AMOLED display with up to 120Hz refresh rate. The display has a punch-hole design notch for the front camera. It has a triple camera setup at the rear comprising a 50MP main camera, an 8MP ultrawide camera, and a 2MP macro camera. The phone has a 13MP selfie camera. The Redmi Note 12 Pro 5G offers an exclusive high-end phone featuring an IMX766 sensor. With this incredibly versatile and trusted camera sensor, coupled with its1.0μm native large pixel size, the Redmi Note 12 Pro 5G easily captures more light and produces high quality, brighter and clearer pictures in all scenarios. The Redmi Note 12 Pro comes in three color options: midnight black, polar white, and ice blue. The phone has a 10-bit 6.67-inch OLED display that supports Dolby Vision and HDR10+. It is a full HD+ display with up to 120Hz refresh rate support. The phone has a triple rear camera setup at the back which includes a 50MP Sony IMX766 primary camera with OIS accompanied by an 8MP ultrawide and a 2MP macro camera. “At Redmi, our consumers are at the heart of everything we do which drives us to constantly work towards democratizing technology hence making it more accessible," said Amit Panda, Country General Manager of Xiaomi Nepal. "Our newly launched Redmi Note 12 series will make flagship-level specs more accessible, raising industry standards and bringing our core philosophy of offering innovation at incredibly honest pricing to life. The Redmi Note 12 series is packed with incredible battery life, amazing camera setup, and powerful performance.” Box Redmi Note 12 Model                            Price 4GB+128GB           Rs 22,999 6GB+128GB           Rs 24,999 8GB+128GB           Rs 26,999 Redmi Note 12 Pro 5G 6GB+128GB           Rs 38,999 8GB+256GB           Rs 41,999

With the government mulling handing over the development of the Budhi Gandaki Hydropower Project to the Nepal Electricity Authority (NEA), a task force has been formed to finalize the share structure of Budhi Gandaki Jalbidhyut Public Limited. The task force led by NEA Deputy Executive Director Pradeep Kumar Thike will revise the share structure of Budhi Gandaki Jalbidhyut Public Limited to give a majority stake in the company to the government-owned power utility. Energy Secretary Dinesh Kumar Ghimire while welcoming the newly appointed Ministry for Energy, Water Resources and Irrigation, Shakti Basnet at NEA on Monday, the share of the company is being restructured as per the instruction of Prime Minister Pushpa Kamal Dahal to advance the much-hyped hydropower project. The government in the last fiscal year decided to build the reservoir-type project on its own and established Budhi Gandaki Jalbidhyut Public Limited for the development of the 12,00MW project. However, the company is yet to come into operation as the government has not provided the budget to get approval for commencement from the Office of the Company Registrar (OCR).   As of now, the authorized capital of Budhi Gandaki company is Rs 20 billion. The Energy Ministry has a 50 percent stake in the company while the Finance Ministry and NEA have 30 percent and 20 percent stakes, respectively. According to NEA, it has the technical expertise on developing big projects but it wants a majority stake in the newly established company. The share structure of the company will be restructured based on the report of the Thike-led task force. As developing storage-type projects is quite expensive compared to the run of the river-type projects, a viability gap funding is likely to be required from the government to develop this project, according to NEA. Budhi Gandaki is a ready-to-go project as its detailed project report (DPR) has already been prepared. Compensation distribution for the land acquisition and houses has also been in the final stage, according to Energy Ministry officials. The project which has been touted as important to ensuring Nepal's energy security as it is expected to help the country to be self-reliant even during the dry season has been in limbo for a long due to uncertainty over the modality of its development. Earlier, Budhigandaki fell victim to policy inconsistency despite facing hardly any problem in land acquisition and completion of DPR. In 2017, the then government led by Pushpa Kamal Dahal awarded a contract to build the project without competitive bidding to China Gezhouba Group Corporation under the engineering, procurement, construction, and financing (EPCF) modality. The Sher Bahadur Deuba-led administration in November 2017 overturned the earlier government’s decision. A high-level team led by Swarnim Wagle, former Vice-chair of the National Planning Commission, was then established. The committee suggested that the project could also be developed using domestic resources. Again, in September 2018, the government led by KP Sharma Oli decided in favor of the Chinese company, reversing the decision of the Deuba-led government. In April of last year, the Sher Bahadur Deuba-led government once more decided to terminate the license granted to the Chinese company since it was not making any progress on the project. Budhi Gandaki, which will be Nepal's second and the largest reservoir-type hydel project with an estimated cost of USD 2.6 billion, is situated at the boundary between the districts of Gorkha and Dhading. The report prepared by the committee headed by Wagle in 2017 suggested that the government should develop the project on its own by providing viability gap funding, covering around one-third of the project development cost. As per its report, the government could cover the cost of land acquisition and resettlement of displaced families which could total as high as Rs 94 billion. A significant chunk of resources can be generated from government institutions. An infrastructure tax being imposed on imported fuel could be an important source of revenue that can be used to develop the project. According to the Wagle report, public enterprises such as Nepal Electricity Authority, Employees Provident Fund, Nepal Telecom, Rastriya Beema Sansthan, Hydroelectric Investment and Development Company, Upper Tamakoshi Hydropower Company, Chilime Hydropower Company, along with Nepal Army, Nepal Police, and the general public could be tapped for the project.