Skip to main content

Top 10 Companies of Nepal by Market Capitalization

Market Capitalization is the number of shares outstanding multiplied by the current share price. It tells you the value of the company's stock in the share market. Normally, the market cap lets you compare similar businesses. 

Looking at the Standard & Poor's (S&P) index as of 17th March 2021, they have divided market caps into 

  • Small-Cap (S&P SmallCap 600): $750 million to $3.3 billion
  • Mid Cap (S&P MidCap 400): $3.3 billion to $11.8 billion
  • Large Cap (S&P 500): $11.8 billion or more

What does market cap tell us?

Large Cap: These are matured companies and major players in their sector. There might not be exponential growth in the short period but in long run, however, provide a consistent increase in share value and dividend payments.

Mid Cap: These are established companies that are supposed to have rapid growth. Most of the mid-companies are in the process of expansion and can offer better returns in both the short-term & long-term. But, inherently they carry more risk than large-cap companies.

Small-Cap: These are young companies with niche markets. These companies are supposed to be more sensitive to economic slowdowns as obviously being small has fewer resources. However, they are in need of cash and have a high potential to offer bonus share, right share and even, FPO (further public offerings).

What sort of Investment Strategy should one take based on the market cap?

People try to diversify their portfolio by having shares representing different market cap such that they can balance the risk and also, take care of opportunities in the market.

What about Nepal?

NEPSE market capitalization as of 9th September 2021 is NRs. 4,043,189.75 million. However, during our research, we couldn't find any standard ceiling to differentiate different market cap groups. The number of listed companies and the industry they represent is pretty limited. It actually limits the ability to utilize the general investment strategy based on the market cap as detailed in the above paragraph. 

However, it does give an indication as to bigger players in the market and their risk absorbing capacity in case of gloomy days. It is generally considered safe to have invest

Here are the top 10 companies of Nepal by market capitalization.



From the above table, you can see that these 10 companies represent a total of 30% of the market which is pretty significant. There are 4 commercial banks on the list with NABIL on the top, followed by Nepal Telecom and Nepal Reinsurance Company.

Note: The data has been picked up as of 9th September 2021 so there might have been few changes by the time this blog was published.



Labels:

Comments

Post a Comment

Most Viewed

Windfall Gain Tax (आकस्मिक लाभमा कर) per Nepal Income Tax Act

Nepal's Income Tax Act defines Windfall gain as a gain obtained by means of lottery, gift, prize, tips, share of earning in a game (जितौरी)  or any other gain acquired incidentally.  Let us explain by example what can potentially be Windfall Gain.  1) Let's say apple recently launched a iPhone 14 in Nepal. Part of such launch, company offered its customer who buys iPhone, an iPad for free. The market value of the iPhone is Rs. 214,000 and that of iPad is Rs. 189,000. In such case, customer who received Rs. 189,000 worth of iPad without any additional cost will be considered a prize hence, a windfall gain. 2) Recently DRS gaming won US$ 292,000 (approx. Rs 4 crore) for being runner's up in the grand finals of the PUBG Mobile Global Championship. Let's assume here that DRS gaming has not been registered as a company but simply represented by individuals. If I am not mistaken, there are 4 members in the team. So, each individual will have won Rs. 1 crore as share of earni...
Post a Comment
Read more

Process of Obtaining Tax Clearance Certificate in Nepal?

A tax clearance certificate confirms that an individual or entity: is in compliance with the Nepalese Income Tax Act, 2058 and its regulations, has submitted the tax return, audit report and necessary schedules, and all the taxes have been duly paid to the Government of Nepal Who issues Tax Clearance Certificate? The Inland Revenue Department (IRD) is authorized to obtain tax clearance certificate on behalf of the Ministry of Finance, Government of Nepal. How do I apply? An application must be filed at the concerned Tax Payer's office with NRs 10 stamp with the following documents enclosed: 1) Entity: Copy of the payment of taxes per Self Assessment submitted to IRD. Copy of the Audit Report duly audited by the member of the Institute of Chartered Accountants of Nepal (ICAN). Copy of the Previous Year Income Tax Return and Copy of Tax Clearance Certificate Obtained if any. Copy of the Permanent Account Number (PAN) Certificate. 2) Individual: In the c...
9 comments
Read more

Nepal Accounting Standard (NAS) for Not for Profit Organizations (NGOs and INGOs) 2018 - Basics

Effective Date: Nepal Accounting Standard Board has published an Accounting Standard for Not for Profit Organizations in November 2019 effective Fiscal Year 2077/78 (July 16 2020, and onwards). Any organization adopting it to prior to the date above shall disclose the fact. Applicable Organization: NAS is applicable to all not for profit organization registered with the Social Welfare Council or working in Nepal under a general agreement, or project offices working under the bilateral agreement with Nepal Government and Foreign Government Purpose: Guide Not for Profit Organizations to prepare the general purpose financial statement to the entire non-profit organization as a single reporting entity . Improve the quality of the data to provide adequate information to the users of the financial statements Reduce the diversity that exists among NPOs in accounting practice and presentation We should note that NAS is based on the Going Concern assumption and the concep...
1 comment
Read more