Narayani Development Bank Opens Applications for 100% Rights Share
31st August 2025, Kathmandu
Narayani Development Bank Limited has officially announced its decision to open applications for a significant 100% rights share issuance and sale.
Application for NDBL Rights Share
This move is designed to provide existing shareholders with the opportunity to acquire new shares at a favorable price, thereby maintaining their ownership proportion in the bank while simultaneously contributing to its capital expansion. The application window is set to open on September 18, marking a key event for the bank and its investors.
Key Details of the Rights Share Issue
The bank will issue one new share for every one existing share held by its shareholders. This 1:1 ratio is what constitutes a 100% rights share issuance. The bank will be issuing a total of 2,624,676 new shares at a par value of 100 rupees per share. This will mobilize a significant amount of capital, totaling 262.47 million rupees, which will serve to strengthen the bank’s financial base and support its future growth initiatives.
A rights issue is a common and preferred method for banks to raise capital. Unlike a public offering (IPO) to new investors, a rights issue gives existing shareholders the exclusive right to purchase new shares, thereby preventing the dilution of their ownership stake if they choose to participate. This approach strengthens shareholder trust and rewards long-term loyalty.
Eligibility and Application Timeline
To determine the eligibility for the rights share issuance, the bank conducted a book closure on August 25. Only those shareholders who held shares of Narayani Development Bank up to August 24 are eligible to apply for the rights shares. This specific date ensures that the rights are accurately allocated to all eligible shareholders.
Eligible shareholders have a three-week window to apply for the rights shares, with the application period running from September 18 to October 8. This provides ample time for shareholders to complete all necessary formalities and submit their applications.
Strategic Purpose of the Capital Raise
The primary purpose of the rights share issuance is to raise additional capital to support the bank’s growth strategy. The funds mobilized from this issuance will be strategically utilized to achieve several key objectives:
Expanding Lending Capacity: The additional capital will significantly boost the bank’s lending capacity, enabling it to provide more loans to businesses and individuals. This will not only increase the bank’s revenue but also support economic activities in the community.
Enhancing Financial Stability: By increasing its paid-up capital, Narayani Development Bank will strengthen its financial health and improve its compliance with regulatory capital requirements set by Nepal Rastra Bank.
Funding Future Growth: The capital will be used to fund various growth initiatives, including the expansion of its branch network, the development of new digital services, and the enhancement of its operational infrastructure.
Strengthening Operational Capacity: The funds will also be used to reinforce the bank’s operational capacity, allowing it to serve a growing customer base with more efficiency and a wider range of services.
The Application Process and Shareholder Benefits
Shareholders who wish to apply for the rights shares can do so through Global IME Capital Limited, which has been appointed as the bank’s issue and sales manager. The application process is designed to be transparent and efficient, with a commitment to adhering to all regulatory requirements.
This rights share issuance is particularly beneficial for existing shareholders for several reasons:
Maintain Proportional Ownership: The 100% rights ratio provides a perfect opportunity for shareholders to maintain their proportional ownership in the bank without any dilution. This is a crucial benefit for investors who believe in the bank’s long-term growth.
Investment Opportunity at Favorable Price: Rights shares are typically offered at a price that is lower than the current market value, providing an immediate investment opportunity for potential future gains.
Contribution to Long-Term Value: By participating in the rights issue, shareholders are directly contributing to the bank’s capital expansion, which in turn will support its long-term growth, stability, and profitability, potentially increasing the value of their shares in the future.
Impact on the Broader Market
For the Nepalese financial sector, rights share issuances are a common and healthy practice that contributes to the capital market’s depth and maturity. They encourage active shareholder participation and reinforce investor confidence in financial institutions. This move by Narayani Development Bank aligns with industry standards and demonstrates its commitment to both its shareholders and the development of the broader capital market.
Conclusion
Narayani Development Bank Limited’s announcement to open applications for a 100% rights share issuance is a significant and positive development. With the application period starting on September 18 and closing on October 8, eligible shareholders have a clear and timely opportunity to expand their investment in the bank. This strategic capital mobilization, managed by Global IME Capital Limited, will not only strengthen the bank’s financial foundation but also enhance its lending capacity and support its future growth initiatives. For existing shareholders, this is a prime opportunity to secure their proportionate stake, reinforce their commitment to the bank, and potentially benefit from its future success.
For More: Application for NDBL Rights Share
