NRN Development Fund Clears Path for Rs. 8.5 Billion IPO

A new chapter is set to unfold in Nepal’s capital market as the NRN Development Fund has received the regulatory pathway to issue an IPO worth approximately Rs. 8.5 billion in foreign currency-linked investment. The development follows the government’s significant amendment to the Securities Registration and Issuance Regulations, allowing the fund to raise up to 85% of its total capital through ordinary shares from Non-Resident Nepalis (NRNs). The approved capital structure allocates 85% to NRN investors, 10% to institutional promoters and 5% to the Government of Nepal. Unlike conventional IPOs in Nepal, the fund’s offering will incorporate mechanisms specifically designed for overseas Nepali investors, including a Rupee-Denominated Forex Account through which investments made in foreign currency will be converted into Nepalese rupees and invested in shares. The fund will also facilitate repatriation, allowing dividends and proceeds from share sales to be transferred back to investors in foreign currency. The fund is developing a Diaspora Investment Management System (DIMS) to enable Nepalis living abroad to participate in the IPO digitally. Through the system, investors will be able to link their Demat accounts, PAN and bank accounts remotely. The platform is expected to be developed within about a month, with partnerships planned with around 20 commercial banks. The fund aims to attract approximately 500,000 to 700,000 NRNs from 177 countries, with a minimum investment requirement of 1,000 shares, equivalent to around Rs. 100,000 or USD 750. The first phase of the IPO is targeted for issuance within 2026. Following the IPO, the fund has also been authorized to issue a Diaspora Bond, which could further expand its capital base. The capital raised is planned to be invested in major infrastructure, energy, tourism and productive-sector projects in Nepal. According to the fund’s management, the government may also facilitate the fund’s participation in selected public projects through Government Asset Monetization. The initiative is expected to create a direct channel between the capital, skills and technology of Nepalis living abroad and Nepal’s productive economy, while potentially supporting foreign-exchange inflows and broader economic development.