About this Calculator
$Track 3-year lock-in periods and gauge market impact of promoter share conversions. Select the relevant tab to perform precise calculations based on current Nepal Stock Exchange (NEPSE) and SEBON regulations.
Features
- 100% mathematically accurate calculations
- Up-to-date with SEBON & NEPSE broker tiers
- Instant client-side performance
- No data sent to server (100% private)
Navigating Promoter Share Lock-ins in NEPSE
Table of Contents
1. Understanding SEBON Lock-in Regulations
In the Nepal Stock Exchange (NEPSE), founders and institutional investors who hold Promoter Shares are legally barred from selling their holdings on the secondary market for a fixed period. According to the Securities Board of Nepal (SEBON), this lock-in period typically lasts for exactly 3 years from the date the company first allots its shares to the general public via IPO.
Our Promoter Lock-in Expiry Calculator tracks this exact timeline. By inputting the IPO allotment date, retail investors can calculate the precise day when millions of locked shares will suddenly become tradable.
2. The Impact of Lock-in Expiry on Stock Prices
When a lock-in period expires, the supply of available shares on NEPSE increases drastically. If the promoters decide to dump their shares to realize profits, the immense supply can crash the stock's secondary market price.
Smart retail traders utilize our tools to monitor impending lock-in expirations. If a fundamentally weak company is approaching its 3-year expiry, it is mathematically prudent to exit the position before the institutional dump occurs. Conversely, a lock-in expiry of a strong microfinance or commercial bank can present an excellent buying opportunity due to temporary panic selling.
3. Participating in Promoter Share Auctions
Sometimes, institutional promoters wish to liquidate massive holdings, or unsold Right Shares are converted into an auction. These shares are sold via sealed bids.
Our Auction Bid Calculator helps you formulate a winning price. It takes the current secondary market LTP, calculates the historical discount averages for similar auctions, and gives you a mathematically sound bid range that ensures you win the allotment without heavily overpaying.
4. Frequently Asked Questions (FAQ)
How long is the lock-in period for promoter shares in Nepal?
As per standard SEBON regulations, promoter shares are locked for exactly 3 years starting from the date of the public IPO allotment.
Can general public buy promoter shares?
Usually, promoter shares are restricted. However, if they are put up for auction and existing promoters do not bid, the general public can bid for them. Note that promoter shares often trade at a steep discount compared to ordinary shares.
Why do prices drop after lock-in expiry?
Prices drop due to basic supply and demand. The sudden availability of millions of tradable shares significantly increases market supply, putting heavy downward pressure on the stock price.