While Nepali migrant workers have shown strong interest in Initial Public Offerings (IPOs) reserved for them, their response to foreign employment savings bonds has remained weak.

The government has allocated a 10 percent reservation in IPOs to channel the earnings of Nepalis working abroad into productive sectors. Additionally, it issues foreign employment savings bonds annually to raise capital from migrant workers.

In the current fiscal year (FY), five companies offering IPOs specifically for Nepalis employed abroad have received overwhelming applications and have been fully subscribed.

According to CDS and Clearing Limited (CDSC), all IPOs issued this fiscal year for Nepalis working abroad have been completely sold out.

CDSC Information Officer Suresh Neupane stated that more than 56,000 Nepali migrant workers have participated in the IPO process. He reported that 56,402 individuals applied for the IPO of Pure Energy, while over 47,000 applied for Guardian Micro Life, the first company to issue an IPO this fiscal year. More than 51,000 applicants sought shares in the three subsequent IPOs.

The government introduced a 10 percent IPO reservation for Nepalis with labor permits working abroad through the budget for the FY 2022/23. This provision was first implemented in the IPO of Kalinchowk Darshan, which offered 108,000 shares to Nepali migrant workers from November 29 to December 13, 2022.

During the initial phase, all applicants received shares. However, with the surge in demand, shares are now being distributed through a lottery system, with many applicants receiving only 10 shares.

Low Sales of Foreign Employment Savings Bonds

Despite the strong interest in IPOs, only about 11 percent of the foreign employment savings bonds issued this fiscal year have been sold.

The government offered foreign employment savings bonds worth Rs 500 million from February 27 to March 31, but sales remained significantly low.

According to the Public Debt Management Office under the Ministry of Finance, only 10.84 percent of the bonds have been purchased.

Mukunda Pokharel, the office’s Information Officer, noted that interest in these savings bonds among Nepalis working abroad has grown recently. Since mid-March 2023, when the Public Debt Management Office assumed responsibility for selling these bonds, efforts have been made to enhance promotion and outreach.

"The sales of foreign employment savings bonds have increased since our office took charge," Pokharel said. "In the current fiscal year, bonds worth Rs 54.2 million have been sold." He added that in previous years, sales were even lower, with only slightly over Rs 20 million sold despite an available quota of Rs 500 million.

Pokharel attributed the weak demand to two main factors: Nepalis working in the Gulf countries show interest but have limited financial capacity, while those in developed countries have the financial means but lack interest in these bonds.

To address this, the office plans to intensify awareness campaigns and promotional efforts to boost sales.

The government first introduced foreign employment savings bonds in FY 2009/10. Since then, it has issued over Rs 17 billion worth of bonds through 27 schemes, but only around Rs 870 million—just over 5 percent—has been sold.