IPO For Nepali Workers Abroad: Does It Even Make Sense?

Think about all the money Nepal receives in the form of remittance. It’s a massive amount; billions of rupees every single month that keeps the country running. But, most of that money gets used up for education fees, buying daily essentials, and daily expenses.

But then, a couple of years ago, the Nepal government decided: “Why not make it easier for migrant workers to apply for IPOs?”

That’s when the 10% IPO reservation was introduced; basically a dedicated slice of shares just for workers abroad. Technically, migrant workers could always apply like the general public, but IPOs in Nepal are oversubscribed like crazy, and this reservation was meant to make it easier for them to actually get a fair shot.

And the barrier to entry is surprisingly low as well. You don’t need lakhs. With just Rs. 1,000, you can apply.

This sounds like quite a deal, doesn’t it? Workers abroad get to grow their money, Nepal’s companies get much-needed capital, and the economy keeps moving. 

But the real question is, does it actually make sense to put remittance money into IPOs, or is this just another good-looking idea that doesn’t work so well in practice?

Before we get into that, let’s dive into why this policy was introduced in the first place. 

The Concept Behind IPO Reservation for Migrant Workers

The government’s logic is simple. Most of the money you send is spent on daily expenses or, if there’s extra, goes into land. That keeps families alive, but it doesn’t really build factories, hydropower plants, or insurance companies.

So policymakers thought: what if migrant remittances could be turned into productive investment? IPOs looked like the perfect channel. Companies get capital, Nepal gets a deeper stock market, and migrant workers get to contribute to the development of the nation, all the while watching their money grow.

So to make it official, SEBON (Securities Exchange Board of Nepal) introduced a rule in November 2022: 10% of every IPO would be reserved just for migrant workers.

To formalize this, SEBON launched the 10% IPO reservation policy in November 2022.

• Who qualifies? Only those who left Nepal on a labor permit (foreign employment).
  

• Who doesn’t? If you’re a student/professional studying/working abroad and you haven’t issued a work permit from Nepal, you can still apply for IPOs, but in the general public category, not the reserved one.
  

• How it works: You need a remittance savings account with at least Rs. 50,000. Applications are made via Mero Share or ASBA during a 4-day exclusive window (extendable if undersubscribed).
  

• Policy tweaks: Regulators have shortened application periods, streamlined processes, and tried to link things better with remittance accounts.

And the response was pretty strong. Over 56,000 migrant workers have already applied!

Market Hype: NEPSE on a High

The scheme came just as Nepal’s stock market was heating up.

As of now, market capitalization of NEPSE has crossed Rs. 4.6 trillion.

Every IPO that comes out is oversubscribed, some more than 10x. Just recently, Swastik Laghubitta Bittiya Sanstha Limited (SLBSL) issued 1,954,371 shares for the public. Guess how many units have been applied for so far? 22,912,840! That’s over-subscription of 117.38 times, meaning, for every share they’re offering, 117 are willing to buy it. And what happens when demand is that high? the market price multiplies as soon as it hits the trading floor. And the rush isn’t over yet. Applications for Swastik Laghubitta are still open, so we’ll have to wait and see just how high the demand (and later, the price) will go.

Even tiny companies get their shares oversubscribed.

On the surface, this looks like the perfect environment for migrant workers to jump in. But anyone who’s watched Nepal’s economic cycles knows how hype usually ends. Land bubbles. Cooperative collapses, the lot.

So yes, IPOs look exciting. But a crowded kitchen isn’t always the safest place to stand. Let’s explore why.

Workers Reality Check

Now, let’s step away from the NEPSE charts.

A Nepali worker working in Qatar or Malaysia, spends roughly $1,000+ just to migrate, often borrowing money at 30–60% annual interest. If you’re a student in the States, your savings vanish into tuition and rent before you can blink. And if you’re a professional in the UK or Australia, yes, you earn better, but you also pay higher costs of living that make Kathmandu look cheap.

In that reality, IPOs in Nepal are quite cheap. But they’re also not effortless.

• Banking gaps: One-third of Nepalis are unbanked. Even if you’ve got an account, it is always advised to have a representative back home to make the process easier. But what if families back home are not familiar with IPO paperwork?
  

• Digital hurdles: Mero Share isn’t exactly progressive. It feels like a website frozen in 2005.
  

• Knowledge gaps: For many abroad, “share” still means splitting the electricity bill with flat mates.
  

• Exiting investments: Selling shares from abroad can get really challenging with time difference, login errors, system crashes and what not.

So yes, IPOs are affordable. But affordability isn’t the only barrier. Access, knowledge, and infrastructure matter too. Now let’s explore why it would be ideal for you to invest in Nepal and the barriers that stand in the way.

Do IPOs Actually Benefit Migrant Workers?

So, this brings us to the big question: Is this whole IPO thing actually a good deal for migrant workers?

Now, full disclosure: we're not investment advisors, so don't take this as financial advice. But, with that out of the way, here’s our take:

Reasons for Investment

1. Strong Market Performance

Let’s start with the obvious: the stock market is buzzing again. As of today, NEPSE closed at 2,763.18. That’s a 23.22 point gain and a 0.84% increase in a single day. We’re inching closer and closer to the 3,000-point milestone.

For a market that was struggling not long ago, this feels like momentum. Investors are excited, and the upward trend is giving many the confidence to stay in.

2. Economic Tailwinds

The broader economy is also offering some comfort. GDP growth is expected to hit 4.5% in FY 2025. Inflation has cooled to 4.06%, down from 5.44% the previous year.

That doesn’t sound dramatic, but for a country like Nepal, this is a small but meaningful sign of stability. And stability is exactly what you want as an investor.

3. Affordable Entry Point

But the real hook for migrant workers? IPOs are cheap. You don’t need lakhs to start. With as little as Rs. 1,000 (basically the cost of one shawarma in Dubai, or a Friday-night takeaway in London), you can apply.

And sometimes, that Rs. 1,000 grows into Rs. 10,000 or more. Try getting that kind of return from a fixed deposit, or compare it with how much land or a small business would cost you; it’s not even close. For migrant workers who want to dip their toes into investing, IPOs are one of the easiest ways to watch small savings multiply.

Challenges and Risks

1. Market Volatility & Speculation

Now for the flip side. Nepal’s stock market has a mind of its own. Unlike more mature markets, where prices are tied to fundamentals like earnings and balance sheets, NEPSE often runs on rumors and vibes.

One day, everything’s green. The next day, panic takes over, and even fundamentally strong stocks are dumped like last season’s iPhones. This herd behavior means gains can vanish overnight.

2. Political and Policy Instability

Then there’s politics. Since 2008, Nepal has seen 13 different governments. Prime Ministers change more often than new versions of the iPhone. This kind of instability makes it hard for long-term policies to stick, and investors are left second-guessing whether today’s promises will survive tomorrow’s reshuffle.

3. Concentration Risk

Look under the hood of the stock market, and you’ll see one glaring problem: banks dominate. A significant share of the market capitalization is tied to banks and financial institutions. That means if the banking sector stumbles even just a little bit, the whole stock market could come crashing. It’s risky to have so many eggs in one basket.

So yes, the Nepali stock market is attractive because it’s accessible, growing, and supported by an improving economy. But it’s also a fragile ecosystem. It’s volatile, concentrated, and shaped as much by politics and gossip as by fundamentals.

The Verdict: Nepal Wins, Workers Unsure

So does the scheme make sense?

For Nepal: Absolutely. It channels remittances into productive use, strengthens the stock market, and reduces reliance on informal channels.

For the diaspora: Maybe. IPOs are cheap; you don’t have to skip rent or groceries to invest. But cheap doesn’t mean simple. The real barriers are access, trust, and ease of use.

At best, IPOs are a good starting point. But without broader reforms, the scheme risks being more symbolic than transformative.

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