Kathmandu. Out of the companies doing life and non-life insurance business, 10 companies are going to issue rights shares. With the approval of the Nepal Insurance Authority, a total of 10 insurance companies, 5 for life insurance and 5 for non-life insurance, will be allowed to issue rightful shares.

The Authority, which had already approved two companies to issue rights shares, recently decided to allow 4 life insurance companies and 4 non-life insurance companies to issue rights shares. The said decision was taken by the meeting of the board of directors of the authority held on August 6.

According to the decision, Suryajyoti Life, Prabhu Mahalakshmi Life, Sanima Reliance Life and Asian Life are the life insurance companies. Life Insurance Corporation (LIC) Nepal had already received approval to issue 86 percent rightful shares. On the other hand, Himalayan Everest, Neco, Sanima GIC, United Azod and NLG Insurance, which are doing non-life insurance business, have received the approval of the authority to issue rights. Out of these, NLG got approval to issue 66 percent right shares only last June.

The minimum paid-up capital of a company doing life insurance business should be 5 billion rupees. Most of the companies went for merger to get the capital accordingly. Despite the merger, since their capital is not as specified, the Insurance Authority has given permission to some companies to issue rights shares. The company has approved the issuance of rightful shares from 10 to 86 percent to 5 companies that have gone to merger and not.

10 percent rights to Suryajyoti Life : According to the decision of the Insurance Authority, Suryajyoti Life Insurance will be entitled to issue 10 percent right shares. Surya Jyoti Life, formed by the merger of former Surya Life and Jyoti Life Insurance, has received approval to issue rightful shares of that amount to meet the specified minimum paid-up capital. Currently, the company's paid-up capital is 4.54 billion 55 million rupees. The company's paid-up capital will exceed 5 billion after the approval of 10 percent rights issue. Which is according to the minimum capital specified by the insurance authority.

17 percent to Lord Mahalakshmi : Prabhu Mahalakshmi has received approval from the authority to issue 17 percent rights shares. Recently Prabhu and Mahalakshmi Life have merged and the paid up capital of Prabhu Mahalakshmi is more than 4 billion 29 crore 96 lakh rupees. After 17 percent rights, the capital will increase to 5.2 billion 63 million rupees.

20 percent to Sanima Reliance : Sanima Reliance Life Insurance, formed by the merger of former Sanima Life and Reliance Life, has received approval to issue 20 percent rightful shares. Currently, the company's paid-up capital is 4 billion 184 million rupees. After issuing the approved 20 percent rights, the company's paid-up capital will reach 5 billion 28 million rupees. Which is more than the minimum capital prescribed by the authority.

Asian Life will issue the most : Among the life insurance companies of Nepal, Asian Life Insurance will be able to issue the highest percentage of rights. The authority has given approval to the company to issue 42 percent rightful shares. Currently, the company's paid-up capital, which is 3.15 billion 53 million rupees, will reach 4.48 billion 5 million rupees after 42 percent rights issue. Which is less than the minimum paid up capital prescribed by the insurance authority. The company has planned to provide insufficient capital through bonus shares.

86 percent to LIC Nepal : India's joint venture company LIC Nepal has received the approval of the Insurance Authority to issue the highest number of rights, i.e. 86 percent. After the issue of right shares of that amount, the company's paid-up capital will reach 4 billion 93 million 49 million rupees. which is less than the prescribed minimum capital.

The Insurance Authority has set a minimum paid-up capital of non-life insurance companies of Rs 2.5 billion. Accordingly, the authority has given approval to some companies to issue rightful shares ranging from 12 to 66 percent to raise capital.

12 percent to Himalayan Everest : Himalayan Everest, the first merger in Nepal's insurance sector, has received approval to issue 12 percent rights. The company has given permission to the authority to issue the rights issue of that amount even though it is going for merger. Along with this, the company's paid-up capital, which is currently 2.3 billion 1.5 million rupees, will reach 2.57 billion 77 million rupees after 12% interest.

25 percent rights to Neko: Neko Insurance, which did not go into the merger, has received the approval of the Insurance Authority to issue 25 percent equity shares. Accordingly, if the company issues rights shares, the company's paid-up capital will exceed 2.51 billion 54 million rupees. Which is more than the minimum capital prescribed by the authority. Along with this, the company will provide the specified capital only through rights.

25 percent to Sanima GIC : The Insurance Authority has approved the issue of 25 percent rights to the merged Sanima GIC Insurance. The paid-up capital of the company, which is currently 2 billion, will reach 2.5 billion rupees after 25 percent rights. Which is the minimum capital specified by the authority.

United Ajod will be allowed to issue 32 percent : United Azod Insurance, which has recently merged two companies, has received approval to issue 32 percent equity shares. Its current paid-up capital is one billion and 90 million rupees. After the approval of 32 percent rights, the company's paid-up capital will reach 2.51 billion rupees.

66 percent of NLG: NLG Insurance, which did not join the merger, will be able to issue the highest percentage of rightful shares among non-life insurance companies. The Insurance Authority has given approval to the company to issue 66 percent rightful shares to the company last June. The special general meeting of the company held last July has also passed the said rights. Currently, the company's paid-up capital, which is 1.45 billion 92 million rupees, will reach 2.42 billion 23 million rupees after 66 percent rights issue. Which is less than what is prescribed by the insurance authority.