What changed for retail investors in book-building IPOs in 2026?

Under SEBON's updated book-building guidelines, retail investors applying for book-building IPOs now receive a 10% discount on the final institutional price. The minimum application size for retail applicants was set at 50 units (kitta). These changes make book-building issues more accessible and directly beneficial to small investors.

What is the minimum retail application for a book-building IPO?

The minimum is now 50 units (kitta) for retail individual investors in a book-building IPO. The specific floor may vary by issue; check the prospectus of each IPO for the exact retail minimum.

What is the 10% discount for retail investors?

In a book-building IPO, institutional investors bid to set the price. Once the final price is determined, retail investors can apply at 10% below that institutional price. For example, if the institutional price is set at NPR 200, retail applicants get shares at NPR 180.

Which companies can now use book-building pricing?

Under the revised SEBON guidelines, companies with a paid-up capital of at least 1 arba rupees (NPR 1,000,000,000) and at least two consecutive profitable years are eligible for book-building premium pricing. This criteria was eased compared to previous rules.

Does this affect fixed-price IPOs?

These changes apply specifically to book-building IPOs. Fixed-price IPOs (the majority of issues on NEPSE) continue under the existing rules. The discount and minimum unit changes are only for issues using the book-building method.

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SEBON new IPO rules 2026: retail discount and book-building changes explained.

SEBON updated its guidelines for book-building IPOs in 2026. The two most investor-relevant changes: retail applicants now receive a 10% discount on the institutional price, and the minimum retail application is 50 units. Companies with at least 1 arba paid-up capital and two consecutive profitable years can now use premium book-building pricing.

5 min read · Updated · 7 Jul 2026

What is a book-building IPO?

Most NEPSE IPOs are fixed-price issues: the company and SEBON agree on a par-value or moderately premium price before the issue opens, and all applicants pay that same price. A book-building IPO works differently. Institutional investors (banks, funds, insurance companies) first bid to indicate the price they are willing to pay. The final issue price is determined from those bids. Retail investors then apply at a price derived from that institutional price.

Book-building is typically used by larger, established companies seeking to raise significant capital at a price closer to what the market actually values them at, rather than at par.

What changed for retail investors in 2026?

Under SEBON's updated guidelines:

Minimum application for retail: 50 units (kitta). Previously the retail minimum was higher, which excluded smaller investors from participating in book-building IPOs. The lower floor makes these issues accessible to more individual investors.
10% retail discount: Retail applicants get shares at 10% below the final institutional price. If institutions set the price at NPR 200, retail investors pay NPR 180. This is a structural advantage built into the rules, not a discretionary offer by the company.

Who can now offer book-building IPOs?

Under the revised criteria, a company is eligible for book-building premium pricing if it meets both conditions:

Paid-up capital of at least NPR 1 arba (NPR 1,000,000,000).
At least two consecutive profitable fiscal years prior to the issue.

Previously the threshold was higher, which restricted book-building to very large institutions. The eased criteria mean more companies in the hydropower, banking and manufacturing sectors may qualify.

What does the 10% discount mean in practice?

Consider a bank that raises NPR 5 arba through a book-building IPO. Institutions bid and agree on NPR 250 per share. Retail investors apply at NPR 225 (10% discount). If the share lists at NPR 260, retail investors start with an NPR 35 gain per share versus the institutional NPR 10 gain. The discount compensates retail for the information asymmetry inherent in the book-building process.

Note that allotment in book-building issues may still be based on a lottery or proportional method depending on oversubscription. The discount on price does not guarantee an allotment.

How do you apply for a book-building IPO?

The application process is the same as a regular IPO: through Mero Share using C-ASBA. The prospectus will specify the retail price (post-discount), the minimum application quantity, and the open and close dates. Punji's bulk IPO tool lists open issues including book-building ones so you can apply without navigating Mero Share separately.