Nepal's OTC Market Surges to NPR 5.62 Billion in FY 2082/83, Signaling Maturing Capital Landscape

Nepal's Over-The-Counter (OTC) market, a crucial platform for trading shares of companies not listed on the Nepal Stock Exchange (NEPSE), has witnessed an unprecedented surge, marking Fiscal Year 2082/83 as a historic period. This vibrant segment of the capital market recorded a staggering NPR 5.62 billion (approximately USD 42.2 million) in transactions, underscoring a significant shift in investor interest and liquidity dynamics beyond the primary exchange.

During the last fiscal year, a total of 20,553,197 units of shares changed hands in the OTC market, mobilizing a substantial capital of NPR 5,624,472,500. This robust activity provides compelling evidence of strong investor confidence and ample liquidity circulating within public limited companies that operate outside the direct purview of NEPSE. The market's composition is largely dominated by companies from the hydropower, pharmaceutical, information technology, and securities brokerage sectors, reflecting key growth areas within the Nepali economy.

Delving into the specifics, 'PhonePe Payment Service' emerged as the most expensive stock traded, with its shares fetching NPR 1,315 per unit on Magh 25, 2082. This premium valuation is largely attributed to PhonePe's near-monopoly and impressive profitability within Nepal's rapidly expanding digital payment ecosystem, indicating investors' willingness to pay for market leadership and strong fundamentals. Following closely, Federal Reinsurance Broker's shares were traded at NPR 1,010, further highlighting the demand for well-positioned unlisted entities.

Conversely, 'Himshila Power Company' recorded the lowest trading price, with its shares exchanging hands at just NPR 51.87 per unit on Mangsir 15, 2082. This figure is notably almost half of its par value of NPR 100, suggesting potential challenges or specific valuation scenarios for the company. Similarly, Budhanilkantha Heritage shares were also observed trading at a low of NPR 63.17, indicating a diverse range of valuations within the OTC space.

In terms of trading volume, 'Budhanilkantha Heritage' led the market with the largest single transaction, seeing 2,319,676 units of its shares transferred on Ashoj 29, 2082. Other significant volume transactions included 1,152,011 units of PhonePe and 1,000,000 units of Nepal Ceramic, demonstrating substantial ownership changes and active participation. At the other end of the spectrum, 'Citizens Capital' recorded the lowest unit transaction, with only 5,000 shares traded on Poush 14, 2082, alongside smaller trades for Time Pharmaceuticals (5,383 units) and Gajryang Valley Hydropower (6,000 units), indicating more targeted or less liquid transactions.

'Gajryang Valley Hydropower Limited' distinguished itself as the most frequently traded company, with nine separate transactions, maintaining a stable share price between NPR 100 and NPR 130. Interestingly, several brokerage firms, including Nasa, Himalayan, Milkyway, Century, and Roadshow, actively utilized the OTC market as a primary platform for facilitating ownership changes, underscoring its utility beyond individual investor trades. Furthermore, three transactions involving 'Sarbottam Steel' saw nearly 1.9 million units of shares traded in the NPR 130-NPR 140 range, signaling significant investment inflows into the manufacturing sector via the OTC route.

This comprehensive overview of the OTC market in FY 2082/83 paints a clear picture of a maturing capital market in Nepal. The NPR 5.62 billion turnover is not merely a number; it signifies that the market itself is increasingly capable of determining the fair value of companies that, despite not being listed on NEPSE, possess strong business fundamentals. This growing sophistication provides alternative avenues for capital mobilization and investment, contributing to the overall depth and resilience of Nepal's financial ecosystem. The robust activity in the OTC market suggests a healthy appetite among investors for diverse opportunities and a growing recognition of the value held by unlisted public companies.