More than 24.1 million locked-in shares from three hydropower companies are set to enter Nepal’s secondary market in July, a development that analysts say could add to selling pressure in an already weak market.

Nepal’s stock market has been under downward pressure in recent weeks, driven by sluggish investor sentiment, lower liquidity, and concerns over poor corporate earnings. The large volume of newly tradable shares could further weigh on market dynamics and stock prices, particularly in the hydropower sector.

The shares set to be released belong to Himalayan Hydropower Ltd., Upper Solu Hydroelectric Company Ltd., and Upper Hewakhola Hydropower Ltd. These shares—previously locked under a mandatory three-year holding period—will become eligible for trading by mid-July. The companies had issued advance notices regarding the expiration of their lock-in periods about a month ago.

Market analysts and brokers note that similar share releases have triggered sell-offs in the past. A recent example is Dordikhola Hydropower Ltd., which saw a sharp rise in trading volume after its lock-in expired on June 21. The following day, over 2.18 million Dordikhola shares changed hands, generating trades worth more than Rs 757.3 million.

Dordikhola had a total of 8.41 million locked shares, including 7.59 million promoter shares, 65,865 employee shares, and 756,420 shares allocated to project-affected locals. The company had distributed its public shares on July 12, 2022.

Himalayan Hydropower Ltd. will see 9.02 million shares become tradable after July 11. This includes 8.7 million promoter shares, 281,750 shares allocated to locals, and 39,365 shares for employees.

Upper Solu Hydroelectric Company Ltd. will release 11.58 million shares on July 13. Of these, 10.19 million belong to promoters, 1.35 million are allocated to locals, and 39,150 to employees. The company had distributed its public shares on July 14, 2021.

Upper Hewakhola Hydropower Ltd. will unlock 3.53 million shares on July 15, comprising 3 million promoter shares, 500,000 shares allocated to locals, and 30,000 shares for employees. The company conducted its IPO in July 2022.

Market observers caution that the staggered release of these shares—amounting to more than 24.1 million in total—could significantly affect trading volumes and stock prices in the hydropower sector and across the broader market, particularly under current bearish conditions.