The Public Accounts Committee (PAC) of the House of Representatives is facing mounting pressure to reconsider its decision that has stalled the Initial Public Offering (IPO) process for several hydropower companies. Lawmakers from the ruling party, alongside industry stakeholders, have urged the committee to reassess the directive issued nearly 18 months ago.

On 28 December 2023, PAC instructed the Securities Board of Nepal (SEBON) to withhold IPO approvals for companies with a net worth per share below Rs 90 and to prohibit promoters from selling one-third of their shares until loan repayments were complete. As a result, several hydropower companies have been unable to issue public shares, sparking widespread concern among investors and local stakeholders.

During a committee meeting on Tuesday, Nepali Congress Chief Whip Shyam Kumar Ghimire strongly opposed directives that interfere with government institutions, stating, “It is against fundamental principles to issue letters that obstruct the work of regulatory bodies. PAC should not be sending directives that hinder the approval process.”

Similarly, CPN-UML lawmaker Gokul Prasad Baskota cautioned that such directives should not disrupt essential economic activities. “Many decisions from here have led to operational deadlocks. If IPO approvals are halted because of our instructions, we must take this matter seriously,” he said.

Hydropower promoters have been lobbying for the directive’s revision, arguing that the committee overstepped its jurisdiction, leading to a freeze on IPOs for 42 companies and rights share issues for over 30 firms.

Ganesh Karki, president of the Independent Power Producers' Association, Nepal (IPPAN), highlighted the growing unrest in affected regions. “The law mandates that 10% of shares be allocated to locals, but since SEBON has withheld IPO approvals, we are unable to issue shares. This has led to frustration, with locals even resorting to vandalism,” Karki explained.

Despite the growing opposition, PAC Chairperson Rishikesh Pokharel defended the decision, arguing that it was necessary to regulate the market. “Even struggling companies are attempting to issue IPOs. While we cannot generalise all firms, our decision was based on industry trends,” he stated. He also signalled a willingness to revisit the directive if it was found to be stalling sectoral growth.

As tensions rise, both PAC and private sector representatives are being urged to engage in constructive dialogue to resolve the impasse. Pokharel acknowledged the need for discussion, saying, “If our decision has indeed crippled the hydropower sector, we are open to reviewing it.”

With hydropower playing a crucial role in Nepal’s economic landscape, a resolution to the IPO deadlock is imperative to restoring investor confidence and ensuring continued sectoral growth.