Free float on NEPSE: how much of the market actually trades?
NEPSE's total market value is about Rs 4.5 trillion - but much of that never trades. Promoter shares sit locked or held for years, and only the public's ordinary shares change hands every day. That tradable slice is the free float, and it has become a live debate: investor groups are calling for every listed company to keep at least 30% of its shares with the public, and SEBON's capital market blueprint plans a free-float index that weights companies only by the shares the public can actually buy. We measured how much of NEPSE is really free to trade.
Promoter shares vs public shares
Most NEPSE companies have two classes of shares:
- Promoter shares, held by the founders and early backers. They are locked for years after the IPO, trade under a separate promoter symbol when they can be sold at all, and in banks and insurers make up a fixed share of capital by law.
- Public (ordinary) shares, issued in the IPO and later. These are the shares you buy and sell on TMS every day.
Banks, development banks and finance companies are usually split 51% promoter, 49% public. Hydropower and manufacturing companies often have much larger promoter blocks. Once a lock-in ends, some companies convert their promoter shares into ordinary shares - after that, the company no longer shows a promoter/public split at all.
How much of NEPSE is free float: a glimpse
We used the latest ownership split for all 279 companies we cover (October 2026) and valued each at its current price.
| Measure (October 2026) | Value |
|---|---|
| Companies that still have a promoter/public split | 181 of 279 |
| Public share of their combined market value | 33% |
| Typical (median) public holding in those companies | 37% |
| Companies with less than 30% held by the public | 53 |
| ... and exactly at 30% | 18 |
In other words, in the companies that still separate the two classes, only about a third of the market value is in public hands. Counting the 98 companies that no longer show a promoter class as fully public - which overstates the float, because many of those shares are still held by the original backers - the public slice of the whole market is still only about 44%.
Where the float is thinnest
The 53 companies below 30% are concentrated in a few sectors:
- Hydropower: 20 of the 23 hydropower companies that still have a promoter class are below 30% public, with a typical public share of about 19%.
- Manufacturing: 12 of 15, typically about 20% public.
- Other sectors (the "others" group of telecom, trading and similar companies): 7 of 8.
- Banks, development banks and finance companies sit at about 49% public almost without exception, so the 30% proposal barely touches them.
How hard the float works
Over the last 250 trading sessions to October 2026, NEPSE traded about Rs 1.49 trillion - roughly Rs 6 billion a day. That is about three-quarters of the public float's value changing hands in a year. And trading is concentrated: the 10 most traded stocks made up about 21% of all turnover, and the top 20 about 33%, out of more than 450 traded symbols. Mutual funds, the largest group of professional investors, hold about Rs 64 billion of listed shares - only around 3% of the float.
Why a thin float matters
- Easier to move. A company with a small float can be pushed up or down by a small amount of money. Our cornering readings and the guide to circular trading explain why thin floats attract manipulation.
- Hidden supply. A small float with a large promoter block behind it means a lot of potential selling once lock-ins end - see our study of promoter lock-in expiry and the live supply calendar.
- Misleading index weights. The NEPSE index weights each company by its full market value, promoter shares included. A company with a 10% float counts as much as one with 50%, even though far fewer of its shares can be bought. A free-float index would fix that - and would be the natural base for the first ETFs (see the future of ETFs in Nepal).
- Harder to sell. Thin floats often mean thin trading. Check how easy a stock is to sell before you buy.
What a 30% minimum would change
If every company had to keep at least 30% with the public, the 53 companies below that line would have to sell or convert promoter shares, or issue new public shares. In the short run that means more supply in exactly the sectors - hydropower and manufacturing - where floats are thinnest. In the long run it would mean deeper, harder-to-move markets in those stocks, and an index that better reflects what investors can actually own.
The full data
This post gives the market-wide picture. The full data - every company's promoter and public split, its float value, how much of the float trades, and mutual fund holdings company by company - is on the ownership page inside the MacroLens NP desk. Start your free 7-day trial or sign in to see it.
This is research on ownership and trading data, not investment advice. Ownership splits change as promoter shares are converted or sold; proposals for a minimum float are not yet rules.
Source: MacroLens NP analysis of NEPSE ownership, price and floorsheet data, October 2026. Cover photo: public domain.
