Kathmandu: Nepal Tea Development Corporation is preparing to launch an initial public offering (IPO), signalling a major step toward expansion for one of the country’s largest tea producers. The company, best known for its Tokla tea brand, has already completed its issuer rating process as part of the groundwork for the planned public share issuance.
The corporation reported tea sales worth Rs 1.09 billion in the last fiscal year, showing a stable revenue trend over the past five years. Its turnover stood at Rs 973 million in 2024, Rs 1.01 billion in 2023, Rs 1.013 billion in 2022, and Rs 1.088 billion in 2021, reflecting consistent business performance despite fluctuations in domestic and export markets.
Originally registered as a public company in 1974, nearly two-thirds of the company was acquired in 2000 by the Triveni Group, owned by the Shanghai family. At present, Triveni holds a 65 per cent stake in Nepal Tea Development Corporation, while the Government of Nepal retains the remaining 35 per cent. That government share is distributed equally among the Ministry of Agriculture, the Ministry of Finance, the Ministry of Industry, and the National Planning Commission, each holding 7 per cent.
The company currently collects and processes tea from seven tea estates and remains the single largest tea producer in Nepal. Tea is cultivated across 1,087 hectares, with a total cultivable plantation area of 1,617 hectares, giving the company substantial room for future agricultural expansion. Its products are marketed under the Tokla label and sold in both domestic and international markets.
According to the company, the proceeds from the proposed IPO will be used primarily to expand plantation areas and support capital expenditure on an adventure park project, while also helping maintain debt discipline and strengthen its overall financial and operational profile. The plan suggests that the company is not simply seeking fresh capital but positioning itself for diversified long-term growth.
Its liquidity position appears comfortable. As of July 2025, the company had significant headroom, around 98 per cent or nearly Rs 278 million, within its drawing power for working capital financing, indicating that short-term cash obligations are well under control. Concerns arising from relatively high working capital intensity, which stood at about 33 per cent during the same period, are considered manageable given the available liquidity cushion.
The issuer rating assessment also took into account the favourable long-term outlook for Nepal’s tea industry. Demand for Nepali tea continues to rise in both domestic and international markets. At the same time, government policies aimed at export promotion are expected to further benefit established producers like Nepal Tea Development Corporation. Since the Nepali tea sector derives a large share of its income from exports, this broader policy environment is seen as a strong tailwind.
The corporation processes multiple varieties, including CTC tea, orthodox tea and green tea. About 80 per cent of its business comes from packaged tea, which sells strongly in the domestic retail market under the Tokla brand. However, the company says the bulk of its export revenue still comes from wholesale unbranded tea. In the last fiscal year alone, 98 to 99 per cent of export turnover was generated through bulk tea sales, underlining the company’s strong foothold in international commodity trade.
For the planned IPO, the company received an ICRA A+ issuer rating, indicating an adequate degree of safety in terms of timely servicing of financial obligations and a low credit risk profile. This rating significantly boosts investor confidence ahead of the public issue.
Financially, the company appears exceptionally solid. It posted an operating profit margin of 10.4 per cent in 2025 and a net profit margin of 5.9 per cent. More importantly, it is entirely debt-free—an unusually strong position for a plantation-based agribusiness. Its current ratio stands at 4.3 times, which reflects a very healthy short-term solvency position and underscores the company’s ability to comfortably meet its liabilities.
With a dominant position in Nepal’s tea sector, a trusted consumer brand, export exposure, government backing, and virtually debt-free books, Nepal Tea Development Corporation is shaping up as one of the more interesting agribusiness IPO candidates in the market.
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