What is a Share (Stock) ? – Simple Explanation for Beginners in Nepal (NEPSE)

A share is simply a small unit of ownership in a company. When you buy a share, you become a shareholder, meaning you own a tiny portion of that company.

In Nepal, companies that want to grow—such as adding new branches, improving services, or expanding operations—often need more money. To raise this money, they issue shares to the public through an IPO (Initial Public Offering). This is the first time the company sells its shares to ordinary people.

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How Companies Give Shares to the Public

1. IPO (Initial Public Offering):
   The company applies to SEBON for approval and then offers its shares to the public.
   Anyone in Nepal with a DEMAT account can apply.

2. After IPO → Shares are Listed on NEPSE:
   Once the IPO distribution is complete, the company gets listed on the Nepal Stock Exchange (NEPSE).
   Only after listing, people can buy and sell shares freely.

** We will discuss further about how you can buy shares of a company in Nepal in upcoming blogs.

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Why Do People Invest in Shares?

• Capital Gain: When the price increases, you can sell your shares at a profit.

• Dividends: Companies give cash or bonus shares from their yearly profit.

• Ownership: You become a part-owner of a Nepali company and you also have voting rights to make company's decisions.

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In Simple Words

A share is a slice of ownership in a company.
Companies first sell these slices through IPO, and later, investors trade them on NEPSE.
For many Nepalis today, investing in shares has become a trusted way to grow wealth while supporting local businesses.