The Nepal Electricity Authority (NEA) is preparing to float shares to the general public. If the plan materializes, the initial public offering (IPO) of the state-owned power utility will be the largest IPO in Nepal's stock market history. In the budget for the current fiscal year, the government had presented the plan for NEA's IPO. The power utility has already received a ‘Double A Double Plus’ credit rating from ICRA Nepal Ltd. A credit rating is a tool that assesses a company’s creditworthiness by measuring the likelihood of defaulting on its debt. It is issued by rating agencies and helps investors determine the risk associated with investing in the shares and corporate bonds issued by a company.

Currently, the paid-up capital of NEA stands at Rs 169.03 billion. The paid-up capital in the current fiscal year will increase further after the addition of the power utility’s profit and the amount to be injected by the government.

In the last six months, NEA earned a profit of Rs 11 billion. If the amount is added, the paid-up capital will further increase. Although a senior NEA official said that they have not yet decided on the price at which the shares will be issued. "The premium price of shares will be determined after further valuation of NEA," the official said. Established in 2041 BS with government investment, NEA has not yet announced dividends to its shareholders. The authority has been investing the profits and the amount received from the government to develop hydropower and transmission infrastructures. Portions of the profits have been added to the paid-up capital of NEA. Therefore, the paid-up capital of the authority is much higher compared to other institutions. NEA seeks to invest up to Rs 800 billion over the next five years in developing electricity transmission lines, substations, distribution lines and hydropower projects. "The plan is to collect Rs 200 billion through the IPO, so the premium value of the authority's shares is expected to be high," the official said. According to sources, NEA is planning to complete the preparations for the IPO issuance within six months to one year. Additionally, the authority is also seeking to issue the IPO in three phases instead of issuing all primary shares at once. As the shares worth billion of rupees will be floated during the proposed IPO, it is unlikely that the shares will be sold at once. Therefore, NEA plans to issue the IPO in three phases with a 10:10 ratio.