Prabhu Mahalaxmi Life Announces Sale of Founder Shares
29th October 2025, Kathmandu
Prabhu Mahalaxmi Life Insurance Company Limited (PMLI) has initiated a significant equity transaction by announcing the sale of 100,000 founder shares.
Prabhu Mahalaxmi Founder Shares
This move follows a formal request from an existing founding shareholder, Mohanlal Agrawal, seeking to divest a portion of his holdings. This secondary sale creates a targeted investment window, primarily for the company’s founding shareholders, a practice deeply rooted in Nepalese corporate governance, particularly within the sensitive and highly regulated insurance sector.
The Strategic Value of Founder Shares in Life Insurance
Founder shares, also known as promoter shares in the Nepalese capital market, are critical for maintaining the stability and strategic direction of a company, especially a life insurance provider. These shares typically grant holders enhanced rights and privileges compared to ordinary (public) shares, often related to voting power, which is essential for controlling the composition of the Board of Directors and key managerial decisions.
The sale of these shares is an internal liquidity event—the proceeds go to the selling shareholder, not the company—but the redistribution among founders is strategic for the entire corporate structure. By restricting the sale initially to existing founders, Prabhu Mahalaxmi Life ensures that the company’s ownership and management influence remain in the hands of key stakeholders. This commitment to strong shareholder governance is crucial in the insurance sector, where public trust and long-term stability are paramount. The life insurance industry in Nepal is constantly evolving, and a stable promoter base provides an important anchor for navigating regulatory requirements and meeting the minimum paid-up capital standards set by the Nepal Insurance Authority.
Defined Timeline and Application Procedure
Prabhu Mahalaxmi Life has outlined a clear and transparent process for the acquisition of these 100,000 founder shares:
Priority Window: A 35-day priority window has been established for all existing founding shareholders to submit their applications. This period is a legal and regulatory requirement in Nepal when a promoter is offloading shares, providing the first right of refusal to the existing promoter group.
Application Deadline: The period commences on the publication date, 12th Kartik 2082 (Wednesday, October 29, 2025), urging eligible shareholders to act with diligence to secure their intended allocation.
Submission Details: Founding shareholders must submit their formal requests to purchase the shares directly to the company’s central office in Kamaladi, Kathmandu. This formalized process ensures all transactions are properly recorded and comply with regulatory mandates.
Valuation and Market Impact
A notable aspect of this announcement is the company’s decision to not disclose the price per share upfront. Unlike public auctions where a minimum bid price is usually set, this method encourages interested founding shareholders to evaluate the shares themselves, potentially based on the company’s Book Value Per Share (BVPS), recent earnings per share (EPS), and its intrinsic value within the life insurance sector. The final share price will likely be determined through negotiation or a sealed bid process among the interested founders, ultimately resulting in a transaction price that is acceptable to the selling shareholder, Mohanlal Agrawal. The restricted nature of this sale minimizes immediate volatility in the public market price of Prabhu Mahalaxmi Life’s ordinary shares.
Liquidity and Future Market Diversification
This founder share sale enables important internal mechanisms for the company and its stakeholders:
Shareholder Liquidity: The sale provides a mechanism for an existing founding shareholder to achieve liquidity from their investment. In the case of founder shares, which often have statutory lock-in periods, secondary sales offer a managed and regulatory-compliant exit strategy.
Contingency for the Public: While priority is strictly given to the founding group, the announcement acknowledges a common provision in such sales: should the shares not be fully subscribed within the 35-day priority window, the company reserves the right to open the sale to other interested investors. This subsequent phase, often through a public auction, ensures the shares are fully allocated, potentially diversifying the company’s ownership base and introducing new capital or strategic partners.
For the founding shareholders, acquiring more shares is an opportunity to increase their equity stake, solidify their control, and benefit directly from the future success of Prabhu Mahalaxmi Life Insurance in the competitive Nepalese insurance landscape. This sector, characterized by growth and increasing regulatory oversight, demands a high level of commitment, making these founder shares a strategically valuable asset.
For More: Prabhu Mahalaxmi Founder Shares
