Approval Delay Continues for Rights Shares of Four Insurance Companies

Kathmandu — Four insurance companies remain stuck in the approval pipeline of the Securities Board of Nepal (SEBON), awaiting permission to issue rights shares despite mounting regulatory pressure to raise their paid-up capital. Prabhu Mahalaxmi Life Insurance, Sanima GIC Insurance, Prabhu Insurance, and United Ajod Insurance have all submitted applications months ago but are yet to receive the green light from SEBON. In contrast, companies from other sectors, including hydropower, have swiftly secured approvals and moved ahead with their rights offerings.

The Nepal Insurance Authority has mandated a minimum paid-up capital of Rs 5 billion for life insurers and Rs 2.5 billion for non-life insurers. To comply with this directive, ten insurance companies—four life and six non-life—opted for rights share issuance. However, the delay faced by these four insurers has highlighted inefficiencies in the approval process, especially considering that companies that applied after them have already launched their issues.

Prabhu Mahalaxmi Life Insurance had submitted its proposal as early as Asoj 7 of the previous fiscal year, aiming to issue over 7.3 million units in a 1:0.70 ratio, valued at around Rs 733.32 million. Sanima GIC Insurance followed on Kartik 30, seeking to raise Rs 365.5 million through 3.655 million units, also in a 1:0.70 ratio. Prabhu Insurance applied on Kartik 12 to issue 8.35 million units in a 1:0.5015 ratio, amounting to more than Rs 835 million. United Ajod Insurance joined the list on Falgun 4, proposing to raise Rs 315 million by issuing 3.15 million units in a 1:0.15 ratio. The issue managers assigned to these proposals include Siddhartha Capital, Citizens Capital, NIC Asia Capital, and Lakshmi Sunrise Capital respectively.