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Capital Plan of 9 non-life Insurance & 4 Life Insurance; Most of the companies raising capital by issuing huge amount of right shares

- ShareSansar, July 26, 2017  on Exclusive , Featured , Latest , Stock Market
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Insurance Board of Nepal (Beema Samiti) had issued a directive to all insurance companies  to increase their paid up capital by the end of fiscal year 2074/75. As per the new guideline, life insurance companies should maintain a minimum paid up capital of Rs 2 arba and non-life insurance companies should have a minimum paid up capital of Rs 1 arba by the end of FY 2074/75.

Insurance companies have the option to raise the capital by issuing right shares, stock dividends, FPO or also by merger. The board had issued a merger related directive one and a half years ago.

Currently there are 17 non-life insurance companies and 9 life Insurance companies. As of now 13 Insurance companies has submitted their capital increment plan, out of which 9 of them are non-life insurance companies.

Among the life insurance companies, Asian Life Insurance, Gurans life insurance, Surya Life insurance and Life Insurance Corporation Nepal have submitted their capital plan.

At present, Asian Life Insurance Company Limited (ALICL) has paid up capital of Rs 80.56 crore. The insurance company proposes to exercise below mentioned options to raise the paid up capital of the company to Rs 2 arba within stipulated time frame. Asian Life insurance has planned to float 50% right shares worth Rs.60 crore 42 lakhs and 10% bonus share worth Rs. 18 crore 74 thousands for the fiscal year 73/74 and FY 74/75 respectively. Asian life insurance had propose to issue 50% right shares of Rs 40 crore 28 lakhs right shares in the fiscal year 72/73 and the company is seeking approval from the board for the approval.

Likewise, Gurans Life Insurance Company limited (GLICL) has maintained Rs.55 crore paid up capital. As per the capital increment plan submitted by the insurance company, the company had distributed 8% bonus share worth Rs.4 crore 40 lakhs from the profit it earned in the fiscal year 72/73 and issuance of 50% right shares worth Rs. 29 crore 70 lakhs. After that its capital will reach 89.1 crore, GLICL will further issue 7% bonus shares worth of Rs. 6 crore and 110% right shares worth Rs. 1 arba 5 crores from the profit of the fiscal year 73/74 and meet the capital requirement.

Surya Life Insurance Company Limited (SLICL) has paid up capital Rs. 62.5 crore. From the profit of FY 71/72 the company had distributed 5% bonus share, the company will be issuing 10% bonus shares worth Rs.6 crores 56 lakhs and 40% right shares worth Rs. 28 crores and 88 lakhs from the FY 72/73. Again from the profit of the FY 73/74 company has planned to issue 10% bonus share worth Rs.10 crore 1 lakhs. The plan submitted by the Surya Life Insurance Company is still short of Rs.88 crores 83 lakhs paid-up capital requirement. Thus, the company has planned for strategic partnership with a foreign company and will be issuing Further Public Offering (FPO) shares to raise remaining capital.

Since the year 2069 Prime Life Insurance Company Limited (PLIC) financial report has not yet been approved. Once the company gets its approval and the company will prepare the capital increment plan. Meanwhile, Prime Life Insurance Company has its paid-up capital to Rs. 48.81 crore.

Life Insurance Corporation (Nepal) Limited (LICN) has its paid up capital maintained at Rs. 1 arba 6 crore and company has to hike their capital of Rs. 94 crore to meet the capital requirement. LICN had provided 25% bonus share worth Rs 26.52 crore to its shareholders. The company is planning to issue 30% bonus share worth Rs 40 crore from the profit it made in the fiscal year 73/74.  After that, In FY 2074/75, the insurance company will again provide 17% bonus share worth Rs 29 crore.

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Non-Life Insurance Capital Plan

Similarly, out of 17 non-life insurance companies, 9 companies have submitted their capital plan. Everest Insurance, Sagarmatha Insurance, Lumbini General Insurance, NB Insurance, NLG Insurance, Prudential Insurance, Neco Insurance and Premier insurance have already submitted their capital plan.

Everest Insurance Company Limited (EIC) had distributed 20% bonus shares worth Rs 2.03 crore and will be issuing 600% right shares from its financial report of the fiscal year 2072/73. After issuance of 20% bonus and 600% right share, its paid up capital will reach Rs 85.05 crore. Again the company will issue 17% bonus share worth 14.95 crore in the fiscal year 74/75.

Likewise, Sagarmatha Insurance Company limited (SIC) has paid up capital of Rs 53.83 crore. SIC will distribute 70% bonus share worth Rs 36.68 crore from the profit it made in the FY 2073/74 and the paid up capital will reach Rs 90.51 crore. Remaining capital will be meet by floating 17% right share worth 9.15 crore in the same FY.

Lumbini General Insurance Company Limited (LGIL) has been issuing 100% right shares to its shareholders and after the issuance of the rights shares, LGIL’s total paid-up capital will reach to Rs 78 crore from current Rs 39 crore. LGIL will distribute 14 percent bonus shares worth Rs 11.12 crore from the profit it made in the fiscal year 73/74 and again the company will issue 14% bonus shares in the fiscal year 74/75 to meet the capital requirement.

NB Insurance Company Limited (NBIL) had issued 100% right shares worth Rs 27 crore in the fiscal year 73/74 after that the non-life insurance company’s total paid-up capital reached Rs 54 crore from existing Rs 27 crore. NB Insurance will further propose 73% right shares worth Rs 43.20 crore and 9% bonus share worth Rs 4.86 crore in the fiscal year 74/75.

From the profit of the fiscal year 73/74, NLG Insurance Company Limited (NLG) has decided to provide 20% bonus shares to its shareholders and further 20% bonus share and 40% right shares worth Rs 29.51 crore  in the fiscal year 74/75 and will able to meet capital requirement of Rs 1 arba.

Prudential Insurance Company Limited (PICL) has paid up capital Rs 42.77 crore. PICL will issue 30% percent right shares worth Rs 12.86 crore for the fiscal year 72/73. As per its capital plan, the company will distribute 15% bonus shares worth Rs 8.55 crore and 40% right shares worth Rs 25.66 crore from the last fiscal year 73/74 then capital will reach Rs 83.81 crore. In the fiscal year 74/75. PICL will distribute 12% bonus share worth Rs 10.78 crore after that its capital will reach Rs 1.059 arba.

According to capital plan submitted by Neco Insurance Company Limited (NIL), it will propose 10% bonus share worth Rs 7.13 crore and 28% right shares worth Rs 21.58 crore in the fiscal year 73/74.  The company will further issue 24% right share in the fiscal year 2074/75.  Earlier NIL had issued 20% bonus and 100% right share, and after that its paid up capital has reached Rs 71.28 crore. However, NIL had recently announced 50% right shares.

Shikhar Insurance Company Limited (SICL) will only propose bonus share to raise the paid up capital of the company to Rs 1 arba within stipulated time frame. SICL has paid up capital of Rs 81 crore. Earlier the company had decided to issue FPO shares but due to the new guideline set by board companies that have already issued Further Public Offering (FPO) shares have been barred from issuing FPO within 5 years of the last FPO.

Premier Insurance Company Limited (PIC) has paid up capital of Rs 44.90 crore. From the profit of the fiscal year 73/74 Premier Insurance will provide 15% bonus share and issuance of 13% right shares worth Rs 6.60 crore. For the Fiscal Year 2074/75, the paid up capital of the insurance company will be Rs 1.01 arba after issuing 75% bonus share worth Rs 43.63 crore.

Nepal Insurance Company Limited (NICL), Oriental Insurance Company Limited, National Insurance Company Limited, Rastriya Beema Company Limited, Himalayan General Insurance Company Limited (HGI), United Insurance Company Limited (UIC), Prabhu Insurance Limited and Siddhartha Insurance Company Limited (SIL) have requested the board for the extension of time.

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(Notes : Rights shares are calculated after the adjustment of bonus shares)

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