Urja Khabar
KATHMANDU; Hydropower companies listed on the Nepal Stock Exchange (NEPSE) lost nearly 6 percent of their market value during the fiscal year 2025/26, reflecting weakening investor confidence and the adverse impact of natural disasters on the sector.
The NEPSE Hydropower Index declined by 5.8 percent, falling from 3,757.79 points at the beginning of the fiscal year to 3,537.30 points on its final trading day, Thursday.
During the review period, the index dropped to its lowest level of 3,147.75 points on October 16, 2025, before recovering to a peak of 4,129.68 points on April 15, 2026. However, the sector witnessed a sharp correction in the final quarter, with the hydropower index shedding 592.38 points over the last three months alone.
According to stock market analysts and brokers, investor sentiment toward the hydropower sector remained subdued throughout the year, leading to lower trading activity and declining valuations. The sector was further weighed down by the extensive damage caused to hydropower infrastructure by last year's monsoon-induced floods.
Government records show that 32 hydropower projects across 10 districts in three provinces sustained damage from flood-related disasters, raising concerns over project operations, revenue generation, and future profitability.
The secondary market also experienced significant volatility during the fiscal year. Trading activity began to weaken around two weeks after the Gen Z protest, with daily turnover plunging to Rs 728.70 million on September 18 from Rs 21.46 billion recorded on July 20. Consequently, the benchmark NEPSE Index fell to around 2,487 points by mid-October from 3,002 points on July 29.
The market regained momentum following the March 5 general elections, pushing daily turnover to Rs 23.59 billion on March 22. However, the recovery proved short-lived as investor sentiment weakened again after the government intensified its crackdown on money laundering cases, triggering renewed caution in the market.
Despite a temporary rebound in the second half of the fiscal year, the hydropower sector ultimately closed FY 2025/26 with a notable decline in market value, underscoring persistent challenges facing Nepal's stock exchange market and its largest listed sector.
