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Shares, IPO, and two markets

What you own, how companies go public, and where NEPSE fits.

6 MIN READ
Words to know
Share
Dividend
IPO
Primary market
Secondary market
Promoter vs public

Share

A slice of ownership in a company. Own shares = own a part of that company.

What a share is

A share is a piece of a company. If a company has 100 equal shares and you buy 1, you own 1% of that company.

Owning a share is not a job salary. You may receive dividends (company profit paid to shareholders when declared). The share price can also rise or fall when people trade it.

Picture 100 shares

Simple ownership math - same idea for any company size.

Company

100 equal shares total

You buy 1

You own 1%

Others hold 99

They own the remaining 99%

Primary vs secondary - where money goes

IPO and NEPSE trading look similar (“I bought shares”) but the cash path is different.

Primary (IPO)

Company issues new shares. You apply and get allotment from that issue.

WHERE THE MONEY GOES

Your money → company (raising capital)

Secondary (NEPSE)

Shares already exist. You buy from another investor who is selling.

WHERE THE MONEY GOES

Your money → selling investor (not the company)

IPO path (primary)

How a company reaches the public the first time.

Company needs capital
IPO opens - public can apply
Allotment / refunds settle
Shares get listed on NEPSE
After that, trading is secondary

Tap a word - open a short definition

Use this if a term still feels mixed up.

Company

Needs capital. Can sell new shares to raise money.

Promoter shares vs public shares

  • Promoter / locked shares - often held by founders or early owners; selling can be restricted for a period.

  • Public / free-float - the portion that can trade more freely among investors on the exchange.

  • If only a small % is public, the same buy/sell size can move the price more.

NOTE

Lock-in rules depend on that issue and regulator notices - check the offer document for the stock.

Quick check

TRY THIS

You buy a listed bank’s share today on NEPSE from another investor. Which market is that?

Remember this

  • A share is ownership. Dividends (profit payouts) are optional; price can also move with trading.
  • IPO / primary = money usually to the company. NEPSE trading = secondary, investor to investor.
  • Promoter vs public shows how much can trade freely on the exchange.
Words to know
Share
Dividend
IPO
Primary market
Secondary market
Promoter vs public

Share

A slice of ownership in a company. Own shares = own a part of that company.