News Finance

Mutual Fund Investment in Nepal: Everything you need to know

Mutual fund investment in Nepal has become a popular investment option for individuals looking to grow their wealth and achieve their financial goals. But what exactly are mutual funds, and why should you consider them as part of your investment strategy? Mutual fund investment is also one of the top 10 assets in Nepal. In this article, we will delve into the world of mutual funds, exploring their benefits, drawbacks, and common misconceptions.

What are mutual funds?

A mutual fund is essentially an investment instrument that combines money from several participants to construct a diversified portfolio of stocks, bonds, or other assets. These funds are managed by professional fund managers, who make investment choices on behalf of the investors.

Types of Mutual Funds

When it comes to mutual funds, there are two primary types: open-ended mutual funds and closed-ended mutual funds. Let’s explore each of these types and their unique characteristics.

1. Open-Ended Mutual Fund

Open-ended mutual funds are the most common type of mutual funds available to investors. These funds do not have a fixed number of shares, and the fund company continuously issues new shares to investors. As a result, open-ended mutual funds are not listed on the NEPSE stock exchange, you may only purchase or sell your shares with the fund issuer based on the NAV (Net Asset Value) of your share on the previous day. The NAV of a share is regularly updated on the fund’s website. In this way open-ended mutual funds offer liquidity and flexibility, allowing investors to buy or sell the fund at any time.

2. Closed-Ended Mutual Fund

Unlike open-ended mutual funds, closed-ended mutual funds have a fixed number of shares. These funds issue a specific number of shares through an initial public offering (IPO), after which they are traded on stock exchanges, much like stocks. Investors can buy or sell closed-ended mutual fund shares on the secondary market, subject to supply and demand dynamics. Closed-ended funds may trade at a premium or discount to their net asset value(NAV).

Why consider mutual funds as an investment option?

Mutual funds have various features that make them an attractive alternative for investors. For starters, they provide diversity by letting you spread your investment over a variety of securities, reducing the impact of particular investing risks. Furthermore, mutual funds are managed by specialists who have competence in assessing markets and picking assets, minimizing the stress of individual stock selection.

Benefits of investing in mutual funds

  • Accessibility: Mutual funds are open to both small and large investors.
  • Affordability: Mutual funds allow investors with limited capital to invest.
  • Professional Management: Mutual funds are managed by experienced fund managers who make investment decisions on behalf of investors, leveraging their expertise and knowledge.
  • Diversification: Mutual funds provide instant diversification by investing in a wide range of securities, reducing the risk associated with individual investments.
  • Liquidity: Investors can buy or sell mutual fund units at the Net Asset Value (NAV) on any business day, providing liquidity and flexibility.
  • Time-Saving: Mutual funds save investors time and effort as the fund manager takes care of research, analysis, and portfolio management.
  • Transparency: Mutual funds provide regular updates on the fund’s performance, holdings, and fees, ensuring transparency for investors.
  • Automatic Reinvestment: Mutual funds reinvest dividends and capital gains automatically, allowing for potential compounding of investment returns.

Drawbacks of mutual funds

The drawbacks of mutual fund investments:

  • Fees and expenses: Mutual funds have associated costs, such as management fees, which can reduce overall returns.
  • Lack of control: Investors rely on fund managers’ decisions, limiting control over individual investments.
  • Potential for underperformance: Despite professional management, mutual funds can still underperform due to various factors.
  • Tax implications: Mutual fund investments may have tax consequences, impacting overall returns.
  • Over diversification: Some funds can be overly diversified, potentially limiting higher returns.

Common misconceptions about mutual funds

Some common misunderstandings about mutual funds might put off potential investors. One prevalent misperception is that mutual funds are only appropriate for cautious investors. While some funds specialize in low-risk investing, others specialize in aggressive growth for individuals wanting bigger returns. Another common misunderstanding is that all mutual funds are the same. Mutual funds, in actuality, differ in terms of investing strategy, risk profile, and asset allocation. Before investing, it is critical to know these distinctions.

How Mutual Funds Work

To understand how mutual funds operate, it’s important to grasp the key elements involved, such as fund managers, net asset value (NAV), units and unit prices, expense ratios and fees, as well as entry and exit loads.

  • Fund managers and their role

Fund managers are professionals responsible for managing the mutual fund’s portfolio. They conduct in-depth research, analyze market trends, and make investment decisions based on the fund’s objectives. Fund managers play a crucial role in the fund’s performance and are responsible for selecting the appropriate securities, rebalancing the portfolio, and ensuring alignment with the fund’s investment strategy.

  • Net Asset Value (NAV)

The net asset value (NAV) represents the per-unit value of a mutual fund’s portfolio. It is calculated by dividing the total value of the fund’s assets minus liabilities by the total number of units outstanding. NAV is typically calculated at the end of each business day and serves as the basis for buying or selling mutual fund units.

  • Units and unit prices

Mutual fund units represent the ownership interest an investor holds in the fund. Each unit represents a proportional share of the fund’s assets. The unit price is derived from the NAV and determines the cost of buying or selling mutual fund units. The unit price fluctuates based on the performance of the fund’s underlying securities.

  • Expense ratios and fees

Mutual funds incur various expenses, including management fees, administrative fees, and operating expenses. The total expenses borne by investors are expressed as the expense ratio, which is the percentage of the fund’s assets deducted annually to cover these costs. It’s important to consider expense ratios when selecting a mutual fund, as lower expenses can have a positive impact on long-term returns.

  • Entry and exit loads

Some mutual funds charge entry and exit loads, which are fees levied when an investor enters or exits the fund. These loads are expressed as a percentage of the investment amount and are meant to cover sales and marketing expenses. While not all mutual funds charge loads, it’s essential to be aware of these fees as they can impact the overall returns.

Selecting the Right Mutual Fund

Choosing the right mutual fund is crucial to align your investment goals and risk tolerance with the fund’s characteristics. Here are key factors to consider when selecting a mutual fund:

  • Assessing investment goals and risk tolerance

Before investing, it’s essential to identify your investment goals, such as capital appreciation, regular income, or a combination of both. Additionally, understanding your risk tolerance is crucial as different mutual funds carry varying levels of risk. By assessing these factors, you can narrow down your options and choose funds that align with your objectives.

  • Evaluating past performance

While past performance is not indicative of future results, evaluating a fund’s historical performance can provide insights into its track record. Consider a fund’s performance over different market cycles and compare it to relevant benchmarks or peer group averages. However, keep in mind that past performance alone should not be the sole determinant of your investment decision.

  • Analyzing fund manager expertise

The expertise and experience of the fund manager play a significant role in a mutual fund’s performance. Research the fund manager’s track record, investment philosophy, and approach to ensure they align with your investment objectives. Look for managers who have demonstrated consistent results and a disciplined investment approach.

  • Considering expense ratios and fees

Expense ratios directly impact your investment returns. Compare the expense ratios of different funds within the same category and consider whether the fund’s performance justifies the costs. Lower expense ratios can contribute to higher net returns over the long term.

  • Understanding the fund’s investment strategy and philosophy

Each mutual fund has a unique investment strategy and philosophy that determines its asset allocation, sector focus, and risk appetite. Understanding the fund’s approach will help you determine whether it aligns with your investment goals and preferences. Consider factors such as the fund’s sector diversification, concentration of holdings, and adherence to specific investment styles.

Investing in Mutual Funds

Once you have selected the right mutual fund, it’s time to embark on your investment journey. Here are key aspects to consider when investing in mutual funds:

  • Opening a mutual fund account

To invest in a mutual fund, you need to open an account with the fund house or an authorized distributor. The account opening process typically involves submitting relevant documents, such as the Know Your Customer (KYC) form, proof of identity, and proof of address. Ensure you comply with the requirements to start investing.

  • Investment options: Lump sum vs. systematic investment plans (SIPs)

Mutual funds offer two primary investment options: lump sum investments and systematic investment plans (SIPs). Lump sum investments involve investing a significant amount at once, while SIPs allow you to invest small amounts at regular intervals. SIPs provide the benefit of rupee cost averaging and can be suitable for investors looking to invest systematically over a more extended period.

  • Understanding the Know Your Customer (KYC) process

The Know Your Customer (KYC) process is a mandatory requirement for investing in mutual funds. It involves providing relevant identification documents and completing the KYC form to comply with regulatory guidelines. The KYC process helps mutual fund companies verify investors’ identities and prevent fraudulent activities.

  • Choosing between growth and dividend options

Mutual funds offer different options, such as growth and dividend plans. In the growth option, any profits made by the fund are reinvested, leading to capital appreciation over time. In the dividend option, the fund may distribute profits to investors periodically. Consider your investment goals and tax implications when selecting between these options.

  • Setting realistic investment expectations

Investing in mutual funds requires setting realistic expectations. Understand that mutual fund returns are subject to market fluctuations and can vary over different time horizons. It’s essential to have a long-term perspective, as short-term market volatility can impact returns. Align your expectations with your investment goals and the risk profile of the chosen mutual fund.

Risks Associated with Mutual Fund Investments

While mutual funds offer diversification and professional management, it’s crucial to be aware of the risks involved. Here are some risks associated with mutual fund investments:

  • Market risk

Mutual fund investments are subject to market risks, including the potential loss of principal. Fluctuations in the stock market or bond market can impact the value of the underlying securities and consequently affect the fund’s performance.

  • Liquidity risk

Liquidity risk refers to the possibility of not being able to buy or sell mutual fund units quickly enough at a fair price. Illiquid securities within the fund’s portfolio or market conditions may hinder the fund’s ability to meet redemption requests.

  • Credit risk

Credit risk arises from the possibility of default by issuers of the debt securities held in a mutual fund’s portfolio. If the issuer fails to make timely interest or principal payments, it can adversely affect the fund’s performance.

  • Interest rate risk

Interest rate risk refers to the impact of changes in interest rates on bond prices. When interest rates rise, bond prices typically decline, leading to potential losses for bond-focused mutual funds.

  • Inflation risk

Inflation risk arises from the erosion of purchasing power over time. If the rate of inflation exceeds the return on investment, the real value of the invested capital may decrease.

You May Also like:


Can I lose money investing in mutual funds?

While mutual funds offer the potential for investment growth, there is also the risk of losing money. Market fluctuations, economic conditions, and other factors can impact the value of the fund's assets and, consequently, the investor's returns.

How long should I stay invested in a mutual fund?

The ideal investment duration for a mutual fund depends on your financial goals and risk tolerance. Mutual funds are generally considered long-term investments, and staying invested for a longer duration can potentially provide higher returns.

Are mutual funds better than direct stock investments?

Mutual funds and direct stock investments cater to different investment preferences and risk profiles. Mutual funds provide diversification and professional management, making them suitable for those seeking a diversified approach. Direct stock investments offer more control but require research and monitoring.

Can I switch between mutual funds?

Many mutual funds offer the flexibility to switch between different funds within the same fund family. However, it's important to consider any associated costs, tax implications, and the impact on your investment strategy before making a switch.

What are the tax implications of mutual fund investments?

Tax implications vary based on factors such as the type of mutual fund, the holding period, and the investor's tax jurisdiction. Capital gains from mutual funds are subject to taxation, either as short-term or long-term capital gains, depending on the holding period.


Mutual funds provide individuals with an opportunity to invest in a diversified portfolio managed by professionals. By understanding the fundamentals of mutual funds, exploring different types, comprehending their working mechanisms, selecting the right funds, and considering associated risks, you can make informed investment decisions. Remember to set realistic expectations, stay informed, and adopt a long-term perspective to maximize the benefits of mutual fund investments. Diversify your portfolio, monitor your investments regularly, and seek professional advice if needed.

News Finance

Unleashing the Power of Stock Market Investment : A Comprehensive Guide

Stock Market Investment: The stock market is a platform where buyers and sellers trade shares or ownership stakes in publicly listed companies. It is a marketplace for investors to buy and sell stocks. The stock market provides a mechanism for companies to raise capital by selling shares to the public, and for investors to potentially profit from the price movements of those shares. It is influenced by various factors such as economic conditions, company performance, investor sentiment, and global events. Stock Market Investment is also one of the top 10 assets in Nepal.

Understanding the Basics of the Stock Market

The foundation of the stock market is made up of stocks and shares. In contrast to shares, which are the fractions of a firm’s stock that can be traded, stocks represent ownership in a corporation. Primary and secondary markets come in two varieties. Companies typically issue fresh shares and stocks on the primary market. The secondary market is where investors exchange these stocks and shares. 

Types of Stock Market Investments

  1. Common stocks
  • Common stocks represent ownership in a company and provide voting rights in shareholder meetings.
  • Investors have the potential to benefit from dividends and capital appreciation as the company grows.

2. Preferred stocks

  • Preferred stocks offer fixed dividends and priority status in case of liquidation.
  • They may also have conversion options to convert into common stocks.

3. Exchange-traded funds (ETFs)

  • Exchange-traded funds (ETFs) are a popular investment option.
  • These funds pool money from investors and invest in stocks of different portfolios.
  • ETFs offer the benefit of broad market exposure and low-cost investment options.

4. Mutual funds

  • Professional fund managers manage mutual funds and are also popular choices for investors.
  • They provide diversification across various stocks or asset classes.
  • Mutual funds cater to different investment objectives and risk preferences.

How to analyze the Stock Market?

Skillful analysis is necessary while investing in the stock market to gain profit. Fundamental analysis and Technical analysis are the two main strategies to analyze the stock market.

Fundamental analysis

In order to determine a company’s overall health and profitability, fundamental analysis involves examining its financial statements, such as balance sheets and income statements. Analysis of economic indicators and industry trends can also shed light on a company’s potential performance.

Technical analysis

Technical analysis, on the other hand, concentrates on examining past price patterns, chart trends, and trade volume. Support and resistance levels on charts, as well as other practices and trends, can aid in locating probable entry and exit positions. Moving averages and the Relative Strength Index (RSI), among other indicators and oscillators, provide useful information on price momentum and overbought/oversold conditions. 

Risk Factors to Consider 

Market risk:

  • Refers to general volatility and uncertainty in the market.
  • Affects stock prices and overall market performance.

Company-specific risks:

  • Poor financial performance can negatively impact individual stocks.
  • Management issues or scandals can erode investor confidence.

Interest rate risk:

  • Associated with changes in interest rates.
  • Can affect borrowing costs and investment returns.

Political and regulatory risks:

  • Arise from changes in government policies or regulations.
  • Geopolitical events can impact overall market sentiment.

Risk Management in Stock Market Investing

Managing risks is essential while investing in stocks, as it is with any investment. Prices are subject to a lot of natural market volatility. Spreading investments across a variety of stocks and industry sectors, or diversification, lessens the impact of risks specific to a single company. Setting attainable investment goals that are in line with your risk tolerance and financial goals is crucial. Potential losses can be reduced by using stop-loss orders, which automatically sell equities when they reach a specific price.

The Importance of Research and Due Diligence

Thorough research and due diligence play a vital role in stock market investing. Company analysis involves examining a company’s financial health, management team, competitive advantage, and growth prospects. Industry analysis assesses the dynamics, trends, and potential risks of a particular sector. Economic analysis considers broader macroeconomic factors, such as interest rates, inflation, and GDP growth, to gauge the overall market conditions. Evaluating the quality and competence of a company’s management team is also crucial as their decisions impact the company’s performance.

The Importance of Continuous Learning and Adaptation

Stock market investing is a dynamic field that requires continuous learning and adaptation. Staying updated with market news, company announcements, and economic indicators is essential for making informed investment decisions. Learning from past mistakes and seeking advice from experienced investors or financial advisors can further enhance investment knowledge and decision-making skills. Expanding your investment horizon beyond stocks to other asset classes, such as bonds or real estate, can provide diversification benefits.

Strategies for Successful Stock Market Investing

The following strategies can be employed to achieve success in the stock market:

  • Buy and hold strategy

The buy-and-hold strategy involves identifying fundamentally strong companies and holding their stocks for the long term, allowing the power of compounding to work.

  • Value Investing 

Value investing focuses on identifying undervalued stocks based on their intrinsic value and buying them at a discount. 

  • Growth investing

Growth investing, on the other hand, targets companies with high growth potential, even if their current valuations seem high. 

  • Dividend Investing

Dividend investing aims to generate income by investing in stocks that offer regular dividend payments. 

  • Momentum investing

Momentum investing involves capitalizing on short-term price trends and market momentum. 

  • Systematic Investment Plan(SIP)

It involves regularly investing a fixed amount in a specific stock or fund, regardless of market conditions, which averages out the purchase prices over time.

How do you earn money in the stock market?

Here are examples of how you can earn money in the stock market:

  • Capital Appreciation: Let’s say you purchase 100 shares of Company XYZ at Rs. 10 per share. Over time, the stock price increases to Rs. 15 per share. If you sell your shares at this price, you will earn a profit of 500 ([Rs 15 – Rs 10] x 100 shares).
  • Dividends: Imagine you own 500 shares of Company ABC, which pays an annual dividend of Rs 2 per share. In this case, you would receive Rs 1,000 (Rs 2 x 500 shares) in dividend income.
  • Trading: Suppose you observe that the stock of Company DEF experiences price fluctuations within a short period. By buying the stock at a lower price and selling it at a higher price, you can earn a profit from these price movements.
  • Dividend Reinvestment: If you own shares in a company that pays dividends, you can choose to reinvest those dividends by purchasing additional shares. Over time, the compounded effect of reinvesting dividends can significantly increase your overall investment value.
  • Initial Public Offerings (IPOs): Let’s say you participate in the IPO of Company XYZ by buying 200 shares at the offering price of Rs 20 per share. If the stock price rises to Rs 30 per share after the IPO, you can sell your shares and earn a profit of Rs 2,000 ([Rs 30 – Rs 20] x 200 shares).
  • Long-term Investing: Consider investing in a diversified portfolio of stable, well-established companies with strong growth potential. Over the long term, as these companies increase in value, your investments can grow significantly.

Psychological Aspects of Stock Market Investing

As we know stock market investing requires analysis and strategy. It is equally important to address the psychological aspects that can affect decision-making. Emotions like fear and greed often lead to irrational investment decisions. It is necessary to overcome these emotions and develop a long-term mindset that can help navigate the inevitable market fluctuations. Remember, investing in the stock market is a marathon, not a sprint.

You May Also like:

Stock Market Investment – FAQs

1. How can I start investing in the stock market in Nepal?

To start investing in the stock market in Nepal, you will need to follow these general steps: Open a Demat account with a licensed stockbroker in Nepal. Complete the necessary documentation and fulfill any requirements set by the stockbroker. Deposit funds into your trading account. Research and analyze different stocks to make informed investment decisions. Place buy orders for the desired stocks through your stockbroker. Monitor your investments and stay updated with market trends and news.

2. Which is the best stock to buy in Nepal?

The best stock to buy in Nepal is determined by a variety of factors, including your investment goals, risk tolerance, and market conditions. Before making any investment decisions, it is critical to undertake extensive research, study financial facts, and consider the long-term prospects of a company. However, some of the top listed companies are Nepal Doorsanchar Company Limited, Nabil Bank Limited, Citizen Investment Trust, Nepal Reinsurance Company Limited, and NIC Asia Bank Limited.

3. Can I invest Rs 100 in the stock market?

The minimum investment amount in the stock market in Nepal varies depending on the stockbroker and the specific requirements they have set. Some brokers may allow investments as low as Rs 100, while others may have higher minimum investment thresholds. It is advisable to check with your chosen stockbroker to understand their minimum investment requirements.

4. How to earn 500 rupees per day in the stock market?

Earning a specific amount in the stock market per day is dependent on various factors, including market conditions, investment strategies, and individual skills. It is important to note that stock market investments come with risks, and there are no guaranteed ways to earn a fixed amount daily. To earn returns, investors need to conduct thorough research, develop a sound investment strategy, diversify their portfolio, and carefully monitor their investments.

5. Which trading is good for beginners?

Two commonly considered trading methods for beginners are: Long-term investing: This approach involves buying and holding stocks for an extended period, typically years, to benefit from long-term price appreciation and dividend income. It allows beginners to avoid the complexities of frequent trading and focus on fundamentals. Index fund investing: Index funds are a type of mutual fund or exchange-traded fund (ETF) that aims to replicate the performance of a specific market index. They offer broad market exposure and diversification, making them suitable for beginners looking for a passive investment strategy.

6. What is the price of NEPSE stock?

The price of NEPSE (Nepal Stock Exchange) stock itself cannot be determined as NEPSE is not a publicly listed company with shares traded on the stock market. However, the NEPSE index represents the overall performance of the stock market in Nepal. The NEPSE index value is determined by the prices of the constituent stocks listed on the exchange, and it can be checked on the official website of the Nepal Stock Exchange or financial news platforms

7. Which share is best for the long term in Nepal?

Over the last fifteen fiscal years, Nabil Bank distributed an impressive average return of 56.83% to its investors. Standard Chartered Bank, on the other hand, provided an average return of 41% to investors in Nepal. Similarly, Muktinath Bikas Bank boasted an average annual return of 27% to its shareholders. These are some of the best companies to invest in Nepal on the basis of their past years performance.


Stock market investment is an exciting journey with enormous financial potential. Investors can traverse the market with confidence by understanding the fundamentals, analysis methodologies, investing possibilities, risk management strategies, and psychological elements. Making informed investment decisions requires extensive research, due diligence, and ongoing learning. Remember that investing in the stock market necessitates patience, discipline, and a long-term outlook. So, equipped with information and a willingness to adapt, set out on this expedition to open the doors to financial prosperity.

News Finance

Role of Investment Bankers in Nepal: Facilitating Financial Growth and Opportunities (2023)

Investment banking plays a crucial role in the financial landscape of Nepal, facilitating economic growth, and providing essential financial services to businesses, government entities, and individuals. In this blog post, we will explore the significance of investment bankers in Nepal and their contributions to the development of the country’s economy.

What is an Investment Banker in Nepal

An investment banker is a financial professional who works in the field of investment banking. They play a crucial role in facilitating various financial transactions and providing advisory services to clients, including corporations, governments, and individuals. Investment bankers are experts in analyzing financial markets, assessing investment opportunities, and executing complex financial transactions.

Here is an overview of the primary functions and responsibilities of an investment banker:

Financial Advisory:

Investment bankers provide strategic financial advice to clients, assisting them in making informed decisions regarding mergers and acquisitions, corporate restructuring, and capital raising. They evaluate the financial viability of potential transactions, conduct valuation analyses, and offer recommendations to maximize value and minimize risks.

Capital Raising:

One of the key functions of investment bankers is to help companies raise capital to finance their operations, growth, or specific projects. They assist in issuing securities such as stocks, bonds, and other financial instruments to attract investors and generate funds for their clients. This process involves underwriting, pricing, and marketing securities to potential investors.

Mergers and Acquisitions (M&A):

Investment bankers play a pivotal role in facilitating mergers, acquisitions, and divestitures. They help clients identify potential acquisition targets or buyers, conduct due diligence, negotiate terms, structure the transaction, and manage the overall process. Their expertise in valuation, financial modeling, and deal structuring ensures smooth and successful M&A transactions.

Initial Public Offerings (IPOs):

Investment bankers assist companies in going public through Initial Public Offerings (IPOs). They help the issuing company determine the offering price, prepare the necessary legal and financial documentation, coordinate with regulatory authorities, and market the IPO to institutional and retail investors.

Risk Management:

Investment bankers provide risk management services to clients, helping them identify, assess, and mitigate financial risks associated with their investments and operations. They employ various risk management techniques and financial instruments to hedge against market volatility, interest rate fluctuations, and other potential risks.

Market Research and Analysis:

Investment bankers continuously analyze financial markets, economic trends, industry sectors, and specific companies to provide clients with valuable insights and investment recommendations. They conduct extensive research, gather data, and prepare detailed reports and presentations to support investment decisions.

Client Relationship Management:

Building and maintaining strong relationships with clients is crucial for investment bankers. They act as trusted advisors, understanding their client’s financial goals, risk appetite, and specific needs. Investment bankers provide personalized solutions, develop long-term relationships, and deliver high-quality service to ensure client satisfaction and loyalty.

It’s important to note that the specific functions and responsibilities of investment bankers may vary based on their specialization, such as corporate finance, mergers and acquisitions, or capital markets. Additionally, investment bankers collaborate closely with other professionals, including lawyers, accountants, and regulatory authorities, to ensure compliance with legal and financial regulations.

Brief History and Evolution:

Investment banking in Nepal has witnessed significant growth and development over the years. While the industry has a relatively short history compared to more established markets, it has been instrumental in supporting the country’s economic progress.

The establishment of the Nepal Stock Exchange (NEPSE) in 1993 played a crucial role in shaping the investment banking landscape. Initially, investment banking activities were primarily focused on stockbroking services and facilitating securities transactions. However, as the Nepalese economy expanded and diversified, investment banks began offering a broader range of financial services to meet the growing demands of businesses and investors.

Regulatory Framework and Key Players:

The regulatory framework for investment banking in Nepal is primarily governed by the Securities Board of Nepal (SEBON). SEBON acts as the regulatory authority responsible for overseeing and regulating securities markets, including investment banks and other market participants.

Key players in the Nepalese investment banking industry include both domestic and international financial institutions. Some of the prominent investment banks in Nepal include:

  • Nabil Investment Banking Ltd.
  • Global IME Capital Limited
  • Citizens Investment Trust
  • NIBL Ace Capital Limited
  • Prabhu Capital Limited
  • Sunrise Capital Limited
  • Agricultural Development Bank Nepal
  • Development Credit Bank Ltd.
  • Everest Bank Limited
  • Himalayan Bank Ltd
  • Lumbini Bank Limited
  • Nepal Industrial & Commercial Bank Ltd.
  • Nepal Rastra Bank
  • Rastriya Banijya Bank

These investment banks provide a wide range of services to cater to the diverse needs of clients in Nepal.

Structure of the Nepalese Financial System

There are many different kinds of institutions that carry out distinct tasks in Nepal’s financial system. Commercial banks, development banks, finance firms, and microfinance institutions (MFIs) are some of the financial institutions that accept deposits. These organizations offer numerous banking services as well as accepting personal deposits.

Commercial banks make up the greatest portion of Nepal’s financial system, accounting for 54.5 percent of all assets. Deposit accounts, loans, foreign exchange services, and other financial goods are just a few of the many services they provide. Development banks concentrate on offering long-term finance for businesses and infrastructure initiatives. Finance firms mostly provide credit and loans to private citizens and small enterprises. MFIs are experts at giving low-income people and disadvantaged areas access to financial services including microloans and microinsurance.

Along with deposit-taking institutions, Nepal’s financial system also includes cooperatives, non-governmental organizations (NGOs) that engage in restricted banking activities, insurance firms, employee’s provident funds, citizen investment trusts, postal savings offices, and the Nepal Stock Exchange.

The central bank and regulating body for the banking industry in Nepal is the Nepal Rastra Bank (NRB). Commercial banks, development banks, finance businesses, and MFIs are all under its supervision and regulation. The formation of monetary policy, oversight of the banking industry, and preservation of the nation’s financial stability are among the NRB’s key duties.

As of mid-March 2022, the financial system in Nepal comprised 27 commercial banks, 17 development banks, 17 finance companies, 66 MFIs, and 1 infrastructure development bank licensed by the NRB. Commercial banks held the largest share of assets at 54.5 percent, followed by the NRB with 17.6 percent. Development banks, finance companies, and MFIs accounted for 5.1 percent, 1.6 percent, and 4.1 percent of the assets, respectively.

On the non-bank side, insurance companies held a 5.5 percent share of the financial system’s assets, while cooperatives accounted for 4.5 percent. These institutions play an important role in providing financial services and facilitating economic growth in Nepal.

Types of investment banks in Nepal?

The word “investment bank” is not frequently used in Nepal in the same sense that it is in some other nations. However, there are financial institutions in Nepal that offer services similar to what investment banks in other countries do. Most commonly, these organizations fall under the merchant bank or development bank categories.

  • Merchant banks: In Nepal, merchant banks offer services including underwriting, issuing, and dispersing securities. Additionally, they provide portfolio management, financial restructuring, corporate consulting services, and mergers and acquisitions (M&A) advice services. In Nepal, capital market operations are greatly facilitated by merchant banks.
  • Development Bank: In Nepal, development banks are primarily concerned with providing long-term finance for businesses, industries, and other types of growth-related initiatives. The expansion of industries including manufacturing, tourism, agriculture, and energy is significantly aided by and supported by these banks. Financial advice, project finance, and investment banking services are frequently offered by development banks to aid with economic growth.

Services Offered by Investment Bankers:

Investment bankers in Nepal offer a comprehensive range of financial services to individuals, corporations, and government entities. Some of the services provided by investment bankers in Nepal include:

Capital Raising:

Investment bankers assist businesses in raising capital through various means, such as initial public offerings (IPOs), rights issues, and private placements. They help clients navigate the regulatory requirements, structure the offering, determine the appropriate valuation, and coordinate with stakeholders throughout the capital-raising process.

Mergers and Acquisitions (M&A) Advisory:

Investment bankers play a vital role in facilitating mergers, acquisitions, and divestitures in Nepal. They provide advisory services throughout the transaction, including target identification, due diligence, valuation, deal structuring, and negotiations. Investment bankers help clients navigate complex M&A transactions and maximize value for all parties involved.


Investment banks act as underwriters for companies issuing securities. They assume the risk of purchasing unsold shares or bonds and ensure the successful completion of the offering. Underwriting services provide a level of assurance to companies looking to raise funds in the capital market.

Corporate Finance Advisory:

Investment bankers offer strategic financial advice to companies on matters such as corporate restructuring, financial planning, and risk management. They help businesses optimize their capital structure, improve financial performance, and identify growth opportunities.

Research and Analysis:

Investment banks in Nepal conduct extensive market research and analysis to provide insights and investment recommendations to clients. They publish research reports, assess market trends, and analyze economic indicators to assist investors in making informed decisions.

Debt and Equity Financing:

Investment bankers help clients raise debt and equity financing from domestic and international sources. They assist in structuring financing solutions, negotiating terms, and facilitating the disbursement of funds.

These are just a few examples of the services offered by investment bankers in Nepal. As the financial industry continues to evolve, investment banks adapt to new market dynamics and expand their service offerings to meet the changing needs of clients.

You May Also Like this:

Capital Raising and Corporate Finance Advisory Services:

Investment bankers in Nepal assist businesses in raising capital through various means, such as equity offerings, debt financing, and hybrid securities. They provide guidance on capital structure optimization, evaluate financing options, and offer strategic advice on the most suitable approach to meet the company’s financial objectives. Investment bankers also help clients assess the costs and benefits of different capital-raising methods, conduct valuation analyses, and navigate regulatory requirements.

Underwriting and Initial Public Offerings (IPOs):

Investment bankers play a crucial role in underwriting securities issuance, including Initial Public Offerings (IPOs). They act as intermediaries between the issuing company and potential investors, assuming the risk of purchasing unsold shares or bonds. Investment bankers assist companies in preparing for an IPO, structuring the offering, determining the offering price, and marketing the securities to institutional and retail investors. Their expertise in valuation, market analysis, and regulatory compliance helps ensure a successful IPO.

Mergers and Acquisitions (M&A) Advisory:

Investment bankers provide M&A advisory services to clients interested in buying or selling businesses. They facilitate the entire M&A process, starting from identifying potential targets or buyers, conducting due diligence, and valuing the business. Investment bankers assist in negotiating deal terms, structuring the transaction, and coordinating with legal and financial advisors. Their expertise in financial analysis, deal structuring, and industry knowledge helps clients navigate complex M&A transactions and maximize value.

Debt and Equity Financing Solutions:

Investment bankers assist companies in securing debt and equity financing to fund their operations, expansions, or strategic initiatives. They help structure financing solutions, negotiate terms with lenders or investors, and manage the documentation and closing processes. Investment bankers evaluate the financial position of the client, assess the risk appetite of potential lenders or investors, and identify the most appropriate sources of debt or equity funding.

Financial Restructuring and Risk Management:

Investment bankers provide financial restructuring services to companies facing financial distress or seeking to optimize their capital structure. They analyze the company’s financial position, assess debt sustainability, and propose restructuring strategies to improve liquidity, reduce debt burden, or renegotiate terms with creditors. Additionally, investment bankers assist clients in identifying and managing financial risks through risk analysis, hedging strategies, and the use of derivative instruments.

In summary, investment bankers in Nepal offer a range of services encompassing capital raising, corporate finance advisory, underwriting, IPOs, M&A advisory, debt and equity financing solutions, financial restructuring, and risk management. Their expertise and guidance in these areas enable businesses to access funding, execute transactions, and navigate complex financial challenges effectively.

Supporting Economic Growth:

Facilitating Capital Investment and Funding for Businesses:

Investment bankers in Nepal play a vital role in facilitating capital investment and funding for businesses. They help connect businesses with potential investors, assist in raising capital through equity and debt financing, and provide guidance on financial strategies to support growth and expansion.

Enhancing Access to Financial Markets for Companies:

Investment bankers help companies access financial markets by providing advisory services on listing requirements, regulatory compliance, and market entry strategies. They assist in navigating the complexities of the capital market, facilitating companies’ ability to raise funds, and increasing their visibility among investors.

Contributing to the Development of the Capital Market Infrastructure:

Investment bankers contribute to the development of Nepal’s capital market infrastructure by promoting transparency, liquidity, and efficiency. They actively participate in market activities, including trading, underwriting, and market-making, which help in the growth and stability of the overall market.

Promoting Foreign Direct Investment (FDI) through Strategic Partnerships:

Investment bankers play a role in attracting foreign direct investment to Nepal by forging strategic partnerships with international investors and companies. They provide market insights, and advisory services, and assist in navigating legal and regulatory frameworks, thereby facilitating the entry of foreign investors and promoting economic development.

Investment Banking Career Opportunities in Nepal: 

  • Skills and Qualifications Required:

To pursue a career in investment banking in Nepal, individuals should possess strong analytical skills, financial acumen, and knowledge of capital markets. They should have a solid understanding of financial modeling, valuation techniques, and risk management. Strong communication and interpersonal skills are also essential to effectively engage with clients and stakeholders.

  • Growth Potential and Opportunities:

The investment banking sector in Nepal offers promising career growth opportunities. As the economy expands and financial markets mature, the demand for investment banking services continues to grow. Professionals in this field can progress through various roles, including analyst, associate, and senior management positions, with opportunities to specialize in areas such as corporate finance, M&A, or capital markets.

  • Training and Development Programs:

Aspiring investment bankers can benefit from training and development programs offered by financial institutions, industry associations, and professional training providers. These programs cover areas such as financial analysis, investment banking principles, regulatory compliance, and industry-specific knowledge. Gaining professional certifications, such as CFA (Chartered Financial Analyst) or ACCA (Association of Chartered Certified Accountants), can also enhance career prospects.

Challenges and Future Prospects:

  • Addressing Regulatory and Legal Challenges:

Investment banking in Nepal faces regulatory and legal challenges, including compliance with evolving securities laws, governance standards, and risk management requirements. Regulatory bodies and market participants need to work together to ensure a robust regulatory framework that fosters investor confidence and market stability.

  • Embracing Technological Advancements and Digitalization in the Industry:

Investment banks in Nepal should embrace technological advancements and digitalization to enhance operational efficiency, improve client experiences, and facilitate faster and more secure transactions. Utilizing technologies like artificial intelligence, data analytics, and blockchain can streamline processes, automate routine tasks, and enable better risk management.

  • Expanding the Scope of Investment Banking Services:

To further develop the investment banking sector, there is a need to expand the scope of services beyond traditional areas. This can include introducing specialized services like sustainable finance, impact investing, and providing advisory support to sectors like renewable energy, infrastructure development, and innovation-driven industries.

Frequently Asked Questions (FAQs): Investment Bankers in Nepal

What is an investment banker in Nepal?

An investment banker in Nepal is a financial professional who provides a range of financial services, including capital raising, advisory, and M&A support to businesses, government entities, and individuals.

What are the functions of an investment banker?

The functions of an investment banker in Nepal include capital raising, underwriting, M&A advisory, debt and equity financing, financial restructuring, and risk management.

What is the role of an investment banker in Nepal?

The role of an investment banker in Nepal is to facilitate financial transactions, provide strategic advice, and support businesses and individuals in achieving their financial objectives through services such as capital raising, M&A, and financial restructuring.

What is the average salary of an investment banker in Nepal?

The average salary of an investment banker in Nepal can vary depending on factors such as experience, seniority, and the size of the institution. Salaries generally range from NPR (Nepalese Rupees) 500,000 to NPR 2,000,000 per year.

What is the process of an investment banker's work in Nepal?

The process of an investment banker's work in Nepal involves conducting market research, analyzing financial data, advising clients, preparing financial models, structuring transactions, coordinating with stakeholders, and facilitating the execution of deals.

What are the bonuses associated with being an investment banker?

Investment bankers in Nepal may receive bonuses based on performance, deal closings, and overall financial performance of the institution. Bonus amounts can vary widely and are often a significant portion of an investment banker's compensation.

How much can an investment banker earn in Nepal?

Investment bankers in Nepal can earn varying amounts depending on factors such as experience, seniority, and performance. Earnings can range from NPR 1,000,000 to NPR 5,000,000 or more per year.

How do investment banks in Nepal operate in 2023?

Investment banks in Nepal operate by providing a range of financial services, including capital raising, advisory, and transaction support. They adhere to regulatory requirements, leverage technology for efficiency, and work closely with clients to meet their financial needs.

What changes can we expect in investment banks in 2024?

Changes in investment banks in 2024 may include increased adoption of technology, digitization of processes, enhanced focus on sustainability and impact investing, and an expanding range of services to cater to evolving client demands.


Investment bankers in Nepal play a vital role in facilitating economic growth, supporting businesses, and providing essential financial services. Through their expertise in capital raising, financial advisory, and risk management, investment bankers contribute to the development of the country’s economy. As Nepal continues to progress, investment banking is poised to play an even more significant role in attracting investment, promoting innovation, and driving sustainable economic development.