Nepal Finance Limited Right Share From Jestha 6 Ratio 10:7

Nepal Finance Limited intends to issue the right shares to shareholders beginning on Jestha 6, 2079 BS. The company Nepal Finance Limited (NFS) will sell the right share at a 1:0.7 ratio. This means that each shareholder with 10 shares can apply for 7 right shares at Rs 100 each. Nepal Finance intends to issue 3,454,474.28 right shares. This works out to Rs 34.54 crores in Total.

Nepal Finance Right Share Details

Company Nepal Finance Limited
Issue Existing Share Holders-General
Right Open Date Jestha 6, 2079 BS
  Jestha 26, 2079 BS
No. of Shares 3454474.275
Issue Manager Prabhu Capital Limited
Current Capital (paid-up) 49.34Crore
Post Right Capital (Paid-up) 83.88 Crore

On Chaitra 8, 2078 BS, the SEBON (Securities & Exchange Board of Nepal) granted the company permission to sell the appropriate shares. On Karthik 1, 2078 BS, the company submitted a request to SEBON.

What is Right Share?

A rights issue is an invitation to existing shareholders to buy more new shares in the company. This type of issue provides existing shareholders with securities known as rights. The shareholder can use the rights to purchase new shares at a discount to the market price on a specified future date. The company is allowing shareholders to increase their exposure to the stock at a reduced price. (source- Investopedia)

Causes and Effects of Right Share

  • A rights issue is one method for a cash-strapped company to raise capital, which is frequently used to pay down debt.
  • For a limited time, shareholders can purchase new shares at a discount.
  • Because more shares are issued to the market as a result of a rights issue, the stock price is diluted and is likely to fall.

 

Things to know before applying rights of Nepal Finance or any company

So, the main point to understand here is that don’t think you are getting cheaper shares at the right issue. Eventually, the share price will fall after the right allocation. So, have a deeper look at the prospectus and financials of the company before applying the right share.

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