Primary market
FPO vs IPO: what Nepali investors need to know.
Both let you buy shares before they reach the open market, and both are applied for the same way. The difference is that an FPO comes from a company already listed, and it does not have to be priced at Rs 100.
5 min read · Updated · 26 August 2026
The short answer
An IPO is a company’s first sale of shares to the public. An FPO is a further sale by a company already listed. IPOs in Nepal are almost always priced at the Rs 100 face value. An FPO can be priced at a premium above it.
Different moments in a company’s life
An IPO is the moment a private company opens itself to the public. Until then it has no market price, because there has been no market. Afterwards it is listed on NEPSE and trades every session.
An FPO comes later. The company is already listed, already has a price on the board, and wants more capital. So it issues more shares to the public.
The price is the real difference
Nepali IPOs are typically issued at Rs 100, the face value, regardless of what the business might be worth. That is why they are so heavily oversubscribed: the issue price is often well below where the shares later trade.
An FPO cannot work that way. If a company’s shares trade at Rs 400 and it sells new ones at Rs 100, it is handing value from existing shareholders to new applicants.
So SEBON allows a qualifying listed company to price an FPO at face value plus a premium. The premium is supported by a valuation, and SEBON’s criteria include capitalised earnings, net worth or book value per share, the 180-day average closing price, and discounted cash flow.
The upshot for you: an FPO is closer to a normal purchase decision. You are paying something near the market price, so it has to be a company you actually want to own.
What you can know before applying
This is where an FPO is genuinely better than an IPO.
With an IPO you have a prospectus and projections. With an FPO the company has been trading in public, publishing quarterly results, declaring dividends, and carrying a price that reflects what investors think. You can look at all of it.
Read the results, look at the price history, and check what the money is being raisedfor. Every symbol on NEPSE has its own page here with price history and broker flow.
How to apply
Identically to an IPO: MeroShare → My ASBA → pick the issue → choose the demat and CRN-linked bank account → enter units → transaction PIN. The money is blocked until allotment.
Budget for the premium. An FPO at Rs 400 needs four times the cash per unit of a Rs 100 IPO, and the blocked amount has to actually be there. See ASBA vs C-ASBA if the CRN part is unfamiliar.
Common mistake to avoid
Applying to an FPO with IPO reflexes. An IPO at Rs 100 is close to a lottery ticket and people apply without much analysis. An FPO at a premium is a considered purchase near market price. The same habit applied to both is how people end up owning something they never examined.
Pro tip
Compare the FPO price against the current market price and against the company’s book value per share. If the premium is far above both, the burden of proof is on the company’s growth story. Our guide to P/E and book value covers how to read those, and the compare tool puts two companies side by side.
Common questions
Answered plainly.
An IPO is a company selling shares to the public for the first time, at which point it becomes listed. An FPO is a further public offering by a company that is already listed and already trading on NEPSE. Same application process, different stage in the company's life.
Because the company already has a market price. If its shares trade at Rs 400, selling new ones at Rs 100 would hand a large gift to new applicants at the expense of existing shareholders. SEBON allows a listed company meeting its criteria to price at a premium — face value plus a premium — so the issue is closer to what the shares are actually worth.
Not arbitrarily. SEBON's criteria for pricing include capitalised earnings, net worth or book value per share, the 180-day average of the closing market price, and discounted cash flow. The valuation supporting the price appears in the offer document, which is worth reading rather than skipping.
It is better documented, which is not the same as safer. An FPO company has a trading history, published results and a market price you can examine, where an IPO company has only a prospectus. But you are paying a price closer to market value, so the built-in discount of a Rs 100 IPO is not there.
Exactly as for an IPO: through MeroShare under My ASBA, using the bank account linked to your CRN, with the amount blocked until allotment. The only practical difference is the amount, since an FPO priced at a premium requires more money per unit.
There are more shares afterwards, so each one represents a smaller slice of the company, and the market usually reacts to that. Unlike a rights issue, there is no automatic exchange-applied price adjustment for an FPO — the market prices it. Whether the money raised is put to good use matters more over time than the initial reaction.
Read next
The rest of the guide.
- How to use the NEPSE TMSCollateral, limit orders, paying for a purchase, and the EDIS step that actually finishes a sale.
- How to evaluate banking stocks in NEPSEBanks are not analysed like other companies. What NPL, capital adequacy and EPS tell you, against the NRB minimums.
- P/E ratio and book value, for Nepali stocksWhat each actually measures, why face value is not book value, and the bonus-share trap that fools both.
- What is NEPSE? A complete guide to the Nepal Stock ExchangeHistory, listed sectors, indices, trading hours and the rules that shape the Nepali capital market.
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