Shikhar Insurance unveils Capital Plan; to issue bonus & FPO shares

Shikhar Insurance Company Limited (SICL) has published its capital plan in Nepal Stock Exchange Limited (NEPSE) today. As per the directive issued by Insurance Board, non-life insurance companies should increase their paid up capital to a minimum of Rs 1 arba by the end of FY 2074/75. Shikhar Insurance will propose bonus share and issuance of Further public Offering (FPO ) shares to raise the paid up capital of the company to Rs 1 arba within stipulated time frame. Earlier, Shikhar Insurance’s 12^th AGM had approved the agenda to float 13.62 lakh units FPO shares. The company had also applied in SEBON and had also fixed its premium price of Rs 1,620 per share. However, Under the recently amended Securities Issue and Allotment Guidelines 2074, Securities Board of Nepal (SEBON) had said companies that have already issued Further Public Offering (FPO) shares have been barred from issuing FPO within 5 years of the last FPO. SICL had floated 5,10,988 kitta FPO shares on Mangsir 17, 2072. It’s been less than 2 years that the company had issued its FPO, so according to the SEBON guideline, Shikhar Insurance is not eligible to issue another FPO in the next 3.5 years. Due to this, SICL might be left with only the option of issuing bonus shares to meet up the minimum paid up capital requirement. Shikhar Insurance’s current paid up capital stands at Rs 81.58 crore. It needs to increase its paid up capital by Rs 18.42 crore to meet up the minimum paid up capital requirement.