30,96,429 units FPO of Nepal Life Insurance to be issued at Rs 2951 per unit; Reserve to increase by 8.8 arba; decision yet to be approved from regulators

The 224^th Board of Director Meeting of Nepal Life Insurance Company Limited (NLIC) held on Jestha 26, 2073 has decided the price of Further Public Offering (FPO) which will be floated in the near future. The price has been set at Rs.2951 per Kitta. The premium added to the par value of Rs.100 is Rs.2851 per Kitta. The FPO is subject to approval from the concerned authorities. NLIC will be floating 30,96,429 unit shares as a part of its FPO. At present its promoter shareholder: public shareholder ratio stands at 80:20. After the FPO promoter shareholder: public shareholder ratio will be maintained at 70:30. After the issuance of Further Public Offering, the paid up capital of the insurance company will reach to Rs 2.47 arba. Issuing the FPO at such high price is debatable and would be a serious issue for the concerned authorities. Also, the small investors (the one who invests below Rs 50,000) would end up investing only 10 units for this issue. SEBON, Beema Samiti will surely look after all the facts and consequences of this overrated FPO of NLIC. The price of NLIC in the secondary market hovered around Rs 3100 few months back even before the book closure of 25 percent bonus share endorsed by the insurance company. It looks that only the limited investors/ shareholders will be benefitted if such issue will get any approval from the concerned authorities. NLIC earned net profit of Rs 23.80 crore in the third quarter of the fiscal year 2072/73. NLIC is being traded at circuit levels at Rs 4,488 at present. It was only Rs 3850 yesterday. Insider trading also persuaded the price to hike so much. Hopefully regulators will do something on this issue.