25th August 2025, Kathmandu
The Nepal Stock Exchange (NEPSE) has officially adjusted the share price of Narayani Development Bank Limited (NDBL) following the bank’s announcement to issue a 100% rights share.
NDBL Share Price
This adjustment, completed after trading hours on Sunday, was made in preparation for the book closure date, which determined the shareholders eligible for the rights issue. The new, adjusted price will be the basis for all future trading of the bank’s shares.
The Rationale Behind the Price Adjustment
The need for a share price adjustment arises from the nature of a rights share issuance. Narayani Development Bank is issuing rights shares at a 1:1 ratio, meaning that for every single share an existing shareholder holds, they are entitled to purchase one additional rights share at a discounted price. Since this issuance increases the total number of outstanding shares, it dilutes the per-share value of the company. NEPSE, in its role as the stock market regulator, recalculates the share price to reflect this dilution, a standard practice that ensures fairness in the capital market.
The book closure date was set for August 24 (Bhadra 8). This means that only shareholders whose names were recorded in the company’s register by the close of business on that day are eligible to apply for the rights shares.
New Trading Price and Investor Impact
Before the adjustment, Narayani Development Bank’s shares were trading at NPR 1,336.65 per share. Following the book closure, NEPSE’s technical adjustment has set the new trading price at NPR 718.33 per share. It is crucial for investors to understand that this drop in price does not represent a loss in their investment value but is a calculated adjustment to reflect the issuance of new shares. The overall value of the shares plus the rights entitlement remains intact, protecting the shareholder’s total wealth.
For example, a shareholder who owned 100 shares at the pre-adjustment price had an investment value of NPR 133,665. After the adjustment, those same 100 shares are now technically valued at NPR 71,833. However, this same shareholder also gains the right to purchase 100 new shares at a face value of NPR 100 each. The ability to acquire new shares at a discounted rate compensates for the dilution, ensuring the overall value of their investment is preserved.
Details of the Rights Share Issuance
The specifics of the rights issue are as follows:
- Issuance Type: 100% rights shares.
- Ratio: 1:1 (One rights share for every one share held).
- Total Shares Offered: 2,624,676 units of rights shares.
- Eligible Shareholders: Those who owned shares by the end of the book closure date, Bhadra 8, 2082 (August 24, 2025).
This rights issue is a strategic move for Narayani Development Bank. By raising additional capital, the bank aims to strengthen its financial foundation, comply with regulatory capital adequacy requirements set by the Nepal Rastra Bank, and expand its lending and growth capacity. This move signals a commitment to long-term stability and growth to both investors and regulators.
Conclusion
The share price adjustment of Narayani Development Bank is a standard and necessary procedure in the capital market. While the share price has been adjusted to NPR 718.33, this change does not signify a loss but rather a technical recalibration that ensures fair trading. The issuance of 2.62 million rights shares in a 1:1 ratio gives existing shareholders the exclusive opportunity to increase their stake in the bank. For market watchers, this event demonstrates the bank’s proactive efforts to raise funds, meet regulatory standards, and position itself for future expansion, reinforcing investor confidence and contributing to the sustained growth of Nepal’s financial sector.
For More: NDBL Share Price