SEBON to Approve Rights Shares Worth Over Rs 6.3 Billion for Insurance Companies
Kathmandu – The Securities Board of Nepal (SEBON) is on track to approve rights shares worth over Rs 6.3 billion for seven insurance companies. This move comes as part of the Nepal Insurance Authority’s directive to increase the paid-up capital of these companies.
The companies in the pipeline include three life insurance providers—Sun Nepal Life Insurance, Prabhu Mahalaxmi Life Insurance, and Asian Life Insurance and four non-life insurers—Nepal Insurance, United Ajod Insurance, Sanima GIC Insurance, and Prabhu Insurance. All seven companies have fulfilled the required procedures and are awaiting SEBON’s approval to proceed with their respective rights issues.
According to SEBON, the issuance of rights shares has been prioritized to help insurance companies meet the regulatory requirement of increasing their paid-up capital. This has temporarily put IPO approvals on hold, with the board focusing on ensuring the financial health of insurance companies.
Among the Life Insurance companies, Sun Nepal Life Insurance plans to issue rights shares in the ratio of 1:0.27, amounting to Rs 1.47 billion, while Asian Life Insurance aims to raise Rs 1.42 billion by issuing shares in a 1:0.42 ratio. Similarly, Prabhu Mahalaxmi Life Insurance is set to issue rights shares worth Rs 733 million in a 1:0.17 ratio.
In the non-life insurance sector, Nepal Insurance will issue rights shares in a 10:4 ratio, amounting to Rs 657.69 million. Prabhu Insurance plans to raise Rs 835.1 million by issuing shares in a 1:0.50156 ratio. Sanima GIC Insurance will issue rights shares worth Rs 500 million in a 10:2.5 ratio, while United Ajod Insurance is set to raise Rs 315 million in a 1:0.15 ratio.
Earlier this week, SEBON approved the rights share proposal for Neco Insurance, setting the stage for approvals of the remaining companies in the pipeline. Despite a prolonged leadership vacuum at SEBON, the board has moved forward with these approvals to meet urgent capital requirements.