NRN Infrastructure and Development (NRNIL) Declares 42.105% Dividend and Announces 100% Rights Share Issue

12th November 2025, Kathmandu

NRN Infrastructure and Development Limited has announced a robust financial strategy for its shareholders, featuring a significant dividend payout followed by a large rights share issue.

NRNIL Declares Dividend

This move is characteristic of a company in the infrastructure and investment sector, particularly in Nepal, where companies often rely on bonus and rights issues to organically grow their capital base to fund new projects.

The company’s Board of Directors, through a meeting on November 11, 2025 (Kartik 25, 2082), approved a total dividend of 42.105% for its shareholders. This substantial return is structured into two components: a 40% bonus share and a complementary 2.105% cash dividend intended specifically to cover the tax liability associated with the bonus share distribution. This ensures shareholders receive the full value of the bonus without having to immediately bear the tax burden from their own pocket. High dividend declarations like this are generally seen as a strong signal of the company’s profitability and its confidence in future earnings, which is a crucial factor for investors in the Nepalese stock market.

The Mechanism of Capital Augmentation

The most striking aspect of the announcement is the sequential capital restructuring plan. The company intends to follow the 40% bonus share distribution with a massive 100% rights share issue (a 1:1 ratio). This crucial sequence is designed to significantly increase the company’s paid-up capital in two distinct phases:

Phase One: Bonus Share: The distribution of the 40% bonus share effectively increases the paid-up capital by capitalizing profits and reserves. This move increases the number of shares held by existing shareholders, thus enhancing their value and investment base.

Phase Two: Rights Share: The 100% rights share will be issued after the bonus shares are listed and the new capital base is established. For instance, if a shareholder holds 100 shares, they will first receive 40 bonus shares, increasing their total to 140 shares. They will then be entitled to purchase an additional 140 rights shares (1:1 ratio on the new capital) at a predetermined price, typically the par value of NPR 100. This influx of capital through the rights issue will provide the company with a significant war chest of fresh funds, which are essential for long-term investments, particularly in capital-intensive sectors like hydropower and other infrastructure projects where NRN Infrastructure is focused.

This two-pronged approach is a common yet aggressive strategy in Nepal’s financial landscape to meet regulatory capital requirements, fund large-scale projects, and expand the company’s investment portfolio rapidly. It reflects the management’s belief in maximizing shareholder returns through capital gains and consistent value creation.

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Investor Timelines and Key Dates

For shareholders, the announcement provides a clear timeline for securing these benefits and participating in the company’s governance.

Book Closure Date: November 27 (Mangsir 11, 2082): This is the most critical date for investors. Only shareholders whose names are registered in the company’s books on this date (i.e., those who purchase shares before the trading day that precedes the book closure) will be eligible to receive the 42.105% dividend and subsequently apply for the 100% rights shares.

AGM Date: December 19 (Poush 4, 2082) (Friday): The company’s 13th Annual General Meeting (AGM) is scheduled for this date at Apprapali Banquet, Thirbam Road, Kathmandu. This meeting is where the shareholders will formally endorse the dividend and rights issue proposals put forth by the Board of Directors. Attendance and participation in the AGM, which is an important platform for shareholders to engage with management and approve strategic decisions, also requires ownership before the book closure date.

The AGM will commence at 9:00 AM, underscoring the company’s commitment to transparency and shareholder engagement in its strategic direction. The decision to hold the meeting in a central location like Kathmandu is aimed at facilitating maximum shareholder participation.

Outlook on Long-Term Growth and Shareholder Value

NRN Infrastructure and Development Limited’s consistent practice of rewarding shareholders through a combination of bonus and rights issues highlights its focus on long-term shareholder value. The company, which is primarily an investment vehicle focused on the infrastructure sector, particularly hydropower, depends heavily on successful capital mobilization. This major capital injection through the rights issue will likely be directed toward acquiring new stakes in viable projects, thereby fueling the company’s growth trajectory and securing future revenue streams.

Such aggressive capital expansion, if deployed efficiently into profitable ventures, typically strengthens the company’s balance sheet and operational scale. While a large rights issue can sometimes lead to temporary market volatility or dilution in Earnings Per Share (EPS) initially, the long-term benefit of a larger, better-funded company with enhanced project capacity often outweighs the short-term effects. The company’s announcement of continuing to expand its capital and strengthen shareholder value confirms its confidence in a proactive and expansive long-term growth strategy within Nepal’s developing infrastructure market.

For More: NRNIL Declares Dividend