Unit 8: Public Offerings and Private Placements
8.1 Legal Requirements for Public Offerings
The public offering = the securities’ offer to the public (the IPO/FPO-and-the-debt issues) — the Securities Act 2063’s approval regime (the exam’s steps): (1) the issuer’s eligibility (the track record, the financials’ health — the prescribed tests), (2) the issue’s preparation (the prospectus’s drafting, the merchant banker’s engagement — the issue manager’s compulsory face, the underwriting arrangement, the credit rating where prescribed (the debt-and-the prescribed issues’ gate — 8.2), the valuation faces), (3) SEBON’s approval (the prospectus’s-and-structure’s vetting), (4) the listing application (NEPSE’s gate), (5) the offering mechanics (the C-ASBA era’s applications-and-allotment — the bank-account blocking system; the oversubscription’s lottery/proportionate faces; the refunds), and (6) the post-issue compliance (the listing’s consummation, the disclosure calendar’s start — Unit 4’s continuous regime).
8.2 Credit Rating Law and Practice in Nepal
The credit rating = the independent opinion on the debt instrument’s-and-issuer’s capacity (the default-risk’s grade — the AAA-to-D ladder). The law’s place: the prescribed issues’ compulsory rating (the debt-and-the prescribed public offerings’ gate in the SEBON regime), the rating agencies’ licensing-and-conduct (the SEBON-licensed raters; the independence-and-conflict disciplines — the issuer-pays paradox’s regulation), the rating’s publication-and-surveillance (the outlooks’-and-downgrades’ discipline). The practice: the licensed agencies’ market (the Indian-JV-and-local raters — ICRA Nepal’s first-mover face, by name), the rating coverage’s growth with the corporate-bond market’s adolescence, and the practice’s critique (the concentration in the debt instruments; the equity-IPO’s rating debate — the “IPO grading” faces; the ratings’ analytical depth’s questions).
8.3 Legal Provisions of Underwriters in Public Offerings
The underwriter = the issuance’s risk-bearer (the unsold portion’s purchase commitment — the firm underwriting) or the best-efforts agent (the sale’s attempt without the purchase). The regime’s faces: the underwriting agreement’s
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