Public Shareholding to Rise to 30%, A Strategic Shift in Telecom Ownership
The Government of Nepal has announced plans to float an additional 22% of shares of Nepal Doorsanchar Company Limited (Nepal Telecom) to the public.
In a landmark announcement, the Government of Nepal has proposed to float an additional 22% of its stake in Nepal Doorsanchar Company Limited (Nepal Telecom) to the public. This would significantly reshape the ownership structure of the company, reducing the government’s stake from the current 92% to 70%, while increasing public shareholding to 30%.
This move, introduced through the latest fiscal budget, aligns with the government’s broader strategy to deepen capital market participation, promote public ownership in state-owned enterprises, and improve governance and transparency in public companies.
Company Overview: Nepal Doorsanchar Company Limited (NTC)
Nepal Doorsanchar Company Limited, widely recognized as Nepal Telecom, is Nepal’s leading telecom service provider with a decades-long monopoly heritage. Even after liberalization, it retains a dominant market presence in mobile, internet, and fixed-line services across the country.
The company is already listed in NEPSE (symbol: NTC) and is a key stock in the telecom and infrastructure sector.
Financial Highlights
Metric | Value |
|---|---|
Paid-Up Capital | NRs. 18 Arba |
Market Capitalization | NRs. 160.83 Arba |
Earnings Per Share (EPS) | NRs. 29.56 (adjusted for book close) |
Book Value Per Share | NRs. 503.93 |
Return on Equity (ROE) | ~6% |
Net Profit (last reported FY) | Over NRs. 5.3 Arba |
Dividend History | Regular dividend-paying; last year cash + bonus mix |
Public Shareholding (Current) | 8% (to become 30%) |
Stock Market Performance
- Last Traded Price (LTP): Around NRs. 894
- 52-Week High: NRs. 1,125
- 52-Week Low: NRs. 807
- Average Daily Volume: Relatively moderate due to low public float
- Beta: Low (NTC is considered a defensive stock with stable returns)
Despite limited volatility, NTC remains a preferred stock for long-term investors and dividend seekers. Its price has shown stability, and interest is expected to rise with the increase in free float.
What the 22% Share Float Means for Investors
The government’s plan to dilute its holding has significant implications for the Nepali capital market:
Increased Liquidity
With a larger share of NTC available for public trading, market activity is expected to grow, improving price discovery and investor access.
Corporate Governance
Increased public ownership may lead to improved transparency, efficiency, and responsiveness in company operations and decision-making.
Wider Public Participation
This move is likely to attract both retail and institutional investors, giving the general public an opportunity to own part of one of Nepal’s most profitable companies.
Analyst Outlook
NTC’s solid fundamentals, healthy dividend record, and the upcoming increase in public float make it a strong contender for long-term portfolio inclusion. However, with telecom facing growing competition and digital disruption, investors should also watch how NTC innovates going forward.
If the additional 22% shares are offered through an FPO (Follow-on Public Offering) or auction route, it may be one of the largest share issuances in recent years.
Conclusion
The planned restructuring of Nepal Telecom’s ownership is a landmark decision in Nepal’s economic reform journey. By floating 22% more shares to the public, the government not only promotes financial inclusion but also brings a high-performing asset into the hands of everyday Nepalis. With strong earnings, solid fundamentals, and a stable market presence, NTC remains one of the blue-chip stocks to watch in the coming fiscal year.