12th October 2025, Kathmandu
In a significant move poised to strengthen its financial base and fuel ambitious expansion plans within Nepal’s vital agricultural sector, Muktinath Krishi Company Limited (MKCL) has announced a substantial capital growth strategy.
Muktinath Krishi Company Dividend
This announcement, made following the company’s board meeting on October 10 (Ashwin 24), includes a proposed dividend distribution for the last fiscal year and a major rights share issuance, which is a clear signal of confidence in its future operational capacity and market potential. This development is essential for investors and stakeholders keenly watching the growth trajectory of one of Nepal’s pioneering agricultural public companies.
Rewarding Shareholders: The 8.42% Dividend Proposal
Muktinath Krishi Company has proposed a total dividend of 8.42 percent for its shareholders, drawn from the profits generated during the fiscal year 2081/82. This generous distribution is strategically structured, comprising a significant portion of 8 percent in bonus shares and 0.42 percent as a cash dividend intended to cover the tax liability on the bonus shares.
The decision to allocate a high percentage of the dividend as bonus shares is a common corporate action aimed at retaining capital within the company while simultaneously increasing the liquidity and number of shares held by existing investors. This approach benefits shareholders by boosting their total shareholding without requiring an immediate cash outlay, thereby setting the stage for increased future returns. This bonus share distribution will increase the company’s current paid-up capital, which stands at NPR 700 million, a necessary preliminary step before undertaking the rights issue. The company’s recent financial results for the fiscal year 2023/24 showed a substantial surge in net profit, which is the solid foundation that supports this robust dividend proposal, reflecting excellent performance and effective financial management throughout the year.
The Mechanics of Capital Growth: 60% Rights Share Issuance
Following the completion of the bonus share distribution, Muktinath Krishi Company has unveiled plans for a major capital injection through a 60 percent rights share issuance. This preemptive right allows existing shareholders to purchase new shares at a discounted rate, proportionate to their holdings after the bonus share allocation.
This move is a strong indication of the company’s strategic roadmap, prioritizing capital raising from its loyal shareholder base to support its next phase of growth. Rights issues are a powerful tool for a company to raise non-debt capital for long-term projects, expansion of operations, new investments in agricultural technology, and overall strengthening of the balance sheet.
To understand the full impact, it is crucial to calculate the new paid-up capital post-bonus share:
- Current Paid-Up Capital: NPR 700,000,000
- Bonus Share Rate: 8%
- Value of Bonus Shares: 700,000,000×0.08=NPR 56,000,000
- Paid-Up Capital After Bonus: 700,000,000+56,000,000=NPR 756,000,000
The proposed 60 percent rights share will be issued based on this new capital base of NPR 756 million. This is a massive leap forward for Muktinath Krishi Company, enabling it to significantly enhance its position as a major player in the country’s agricultural value chain. This substantial capital increase is expected to fund key initiatives, including expanding distribution networks, investing in modern agricultural infrastructure, and potentially exploring new market segments, all of which are critical to the company’s mission of connecting farmers with Muktinath and consumers with Muktinath. The strategic sequencing of the bonus share followed by the rights share is designed to maximize capital accumulation and provide the necessary equity cushion for large-scale corporate ventures.
Key Dates for Investors: AGM and Book Closure
For investors to be eligible for both the proposed dividend and the subsequent rights shares, they must hold shares on the date set for the book closure. Muktinath Krishi Company has set the book closure date for October 31 (Kartik 14).
This means that only shareholders whose names are registered in the company’s book up to the day before the book closure (i.e., on Kartik 13, 2082) will be eligible to receive the 8% bonus shares and the 0.42% cash dividend, and subsequently, to apply for the 60% rights shares.
The proposals for both the dividend and the rights share issuance will be presented for final endorsement at the company’s upcoming Annual General Meeting (AGM) which is scheduled to be held on November 7 (Kartik 21). The AGM serves as the final corporate forum for shareholders to approve the board of directors’ proposals, making this a pivotal meeting for the company’s strategic future. While announcements regarding dividend and rights proposals from the board are significant, the regulatory clearance from relevant authorities and the final approval from the shareholders at the AGM are the ultimate steps before implementation.
Driving Future Agricultural Growth
Muktinath Krishi Company’s move to boost its capital is a powerful and proactive step toward realizing its vision of playing a managerial role in the overall agricultural value chain. By strengthening its capital base, the company positions itself to better address the complex challenges and opportunities within the Nepali agriculture sector, from ensuring quality agri-inputs to efficient market-oriented approaches for agricultural output.
The proceeds from the rights share issue are intended to support the company’s future agricultural expansion and operational growth. This focus on long-term sustainability and value creation underscores Muktinath Krishi Company’s commitment to being a leader in an industry critical to the nation’s economy. This strategic financial maneuver is expected to enhance shareholder value, improve the company’s financial flexibility, and solidify its foundation for sustained growth in the dynamic agricultural landscape.
This detailed plan showcases Muktinath Krishi Company’s intent to leverage its strong performance in the last fiscal year, marked by significant profit growth, into a major capital-raising exercise that will support its ambitious long-term goals.
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