Confusion regarding dividend of Sahara Bikas Bank clarified; Shareholders to receive 35.3% bonus shares

Exactly a week ago i.e. on Poush 23, 2075 Sahara Bikas Bank (SHBL) had endorsed a bonus dividend of 12.3% and the notice was published on the Nepal Stock Exchange (NEPSE)'s website. However, the problem was, the noticed said that the dividend was for FY 2075/76. This might have been a typo error, which is understandable but this article is about the confusion regarding the percentage of bonus dividend that has been endorsed.

In the notice published by SHBL, they haven't mentioned the percentage but have mentioned the absolute figures only. According to that, the following information can be drawn:

Current paid-up capital: Rs. 7,29,94,800

The endorsed dividend for FY 2073/74: Rs. 1,67,88,804

The endorsed dividend for FY 2074/75: Rs. 89,78,360.40

Endorsed right shares for FY 2074/75: Rs 18,24,87,000

So from the information above, the company has endorsed 23% bonus for the FY 2073/74 from that year's profit. Similarly, it has endorsed 12.3% bonus for the FY 2074/75. This bonus is calculated on the basis of current paid-up capital without including the bonus of FY 2073/74. Similarly, the 250% right shares mentioned above is still undersubscribed. A total of 9,21,148.70 units promoter right shares are still not subscribed and an auction will be opened for the same soon.

Thus, after all of this gets approved by the AGM and the NRB, the total paid-up capital of SHBL will stand at Rs 28 crore 12 lakh.

Sahara Bikas Bank is a one-district development bank operating at Malangwa-9, Sarlahi – Nepal. Although being a one-district bank it has already joined in the ECC (Electronic Cheque Clearing) system of Nepal Clearing House. While speaking with the CEO of the bank regarding this confusion, Mr. Binay Kumar Shah mentioned, "In the last 9 months of this FY we have achieved 150% business growth. We have also launched SMS banking service for our customers and we've giving CSR our top priority, not just as an obligation but as a proactive gesture to express our gratefulness to the community we operate in."

Similarly, the shares of SHBL was last traded in NEPSE on Jestha 25, 2074. It trading was halted when they signed an agreement with Deva Bikas Bank (DBBL) for acquisition. Mr. Shah said, "The discussion for our acquisition by DBBL is going on. We are yet to conduct the AGM for FY 2073/74 and 2074/75. The AGM will be conducted soon and then we'll finalize the acquisition."

After acquiring SHBL, Deva Bikas Bank will have acquired a total of 3 BFIs. Sahara’s merger process with Sahayogi Vikas Bank was abruptly canceled in Poush 2074, as a result of which it was increasingly difficult for the bank to increase its paid-up capital as per NRB's directive. As a 1-district level development bank, it should have increased its paid up capital to Rs 50 crore by the end of FY 2073/74. Its paid-up capital currently stands at Rs 7.29 crore only and even after the bonus and right the capital will reach Rs 28.12 crore only.