PhonePe Share Deal Drives OTC Market Revenue as Government Collects Rs 300 Million in Capital Gains Tax

Kathmandu — The government’s revenue collection from Nepal’s Over-the-Counter (OTC) share market has crossed Rs 300 million in the current fiscal year, but the figures reveal that the entire market’s performance has been heavily influenced by a handful of large transactions rather than broad-based trading activity.

According to Nepal Stock Exchange (NEPSE) data, OTC transactions generated more than Rs 300.7 million in capital gains tax by Ashar 5. A significant portion of this revenue came from the sale and purchase of PhonePe shares, highlighting the impact of high-value private share deals on government revenue.

The PhonePe transaction alone contributed Rs 183.5 million in capital gains tax, accounting for nearly two-thirds of the total tax collected from the OTC market. The large contribution indicates that a single corporate share transaction played a decisive role in boosting OTC revenue during the year.

In Magh, 1.15 million units of PhonePe shares changed hands at Rs 1,315 per share. Compared with the face value of Rs 100 per share, the transaction was conducted at a much higher valuation, resulting in a substantial capital gain and a corresponding increase in tax collection.

Monthly data shows that OTC market activity remained relatively limited throughout the year, except during periods when major corporate share transactions took place. The highest tax collection was recorded in Magh at Rs 197.4 million, followed by Rs 88.7 million in Poush and Rs 74.2 million in Chaitra.

The figures suggest that Nepal’s OTC market is still dependent on occasional large transactions rather than regular participation from multiple companies and investors. While the platform has helped create liquidity for shares of unlisted companies, its contribution remains concentrated in a few deals.

Unlike the OTC market, the regular secondary share market continues to remain the primary source of capital gains tax revenue for the government. Investors trading listed shares paid Rs 9.54 billion in capital gains tax until Jestha of the current fiscal year.

However, revenue from the secondary market has declined compared with the previous year. Investors had paid Rs 15.27 billion in capital gains tax during the same period last year. The decline reflects the impact of falling share prices and reduced profit-making opportunities for investors in the stock market.

The contrasting trend between the OTC and secondary markets highlights two different realities of Nepal’s share market. While the OTC market witnessed a revenue boost from a few high-value corporate transactions, the broader listed market faced pressure due to weak market performance.

The OTC platform was introduced to facilitate trading of securities that are not listed on NEPSE, including companies removed from listing or those unable to meet listing requirements. The mechanism aims to provide liquidity to shareholders and protect investor interests, but the latest data shows the need for greater participation and diversification to make the market more sustainable.

The current fiscal year’s figures indicate that corporate valuation changes and private share transactions can significantly influence government revenue, but long-term growth of the OTC market will depend on attracting more companies and creating a more active trading environment.