United Modi Hydropower Dividend and Bonus Announcement
22nd February 2026, Kathmandu
The hydropower sector in Nepal continues to attract significant investor interest as United Modi Hydropower Limited (UMHL) officially announces its dividend proposal for the previous fiscal year. Following the board of directors meeting held on February 20, 2026 (Falgun 8, 2082), the company has moved to reward its shareholders through a combination of bonus shares and cash distributions. This decision reflects the company’s ability to maintain a profitable trajectory despite the inherent challenges of the energy sector, such as seasonal water flow variations and infrastructure maintenance costs. As a publicly listed company on the Nepal Stock Exchange, United Modi’s announcement is a critical signal to the market regarding its financial health and its commitment to providing a consistent return on investment to its diverse base of retail and institutional shareholders.
United Modi Hydropower Dividend
The specifics of the United Modi Hydropower Dividend include a proposal to distribute 7 percent bonus shares and a 0.36842 percent cash dividend, the latter primarily intended for tax purposes. These percentages are calculated based on the company’s current paid up capital of 123,505,000 Nepali rupees. By opting for a higher ratio of bonus shares compared to cash, the company is effectively capitalizing its reserves. This strategy allows the firm to retain liquidity within its accounts to fund potential expansion or debt servicing while simultaneously increasing the number of shares held by each investor. For the shareholder, receiving bonus shares is often seen as a long term benefit, as it increases their total equity in the company and provides the potential for greater capital gains as the stock price fluctuates in the secondary market.
Before any shareholder can receive these benefits, the proposal must navigate a two tier approval process. First, the plan must be vetted and authorized by the Electricity Regulatory Commission (ERC) of Nepal. The commission ensures that the dividend distribution does not compromise the company’s ability to maintain its power plants or meet its technical obligations to the national grid. Following regulatory approval, the proposal will be presented for final ratification at the company’s upcoming 12th Annual General Meeting (AGM). This meeting provides a platform for shareholders to review the annual financial statements and cast their votes on the board’s recommendation. This democratic process is a cornerstone of corporate governance in Nepal, ensuring that the interests of minority shareholders are protected and that the company’s management remains accountable.
The financial strength of United Modi Hydropower is rooted in its operational projects, particularly the Lower Modi-1 Hydropower Project. Located in the Parbat district, this project has been a consistent contributor to the national grid. The revenue generated from power purchase agreements (PPA) with the Nepal Electricity Authority (NEA) forms the basis of the company’s profit. In recent years, the company has focused on optimizing its generation efficiency and reducing its administrative overhead. The declaration of a 7 percent bonus share is a testament to the success of these operational improvements. It indicates that the company has generated sufficient net profit after accounting for depreciation, interest on loans, and corporate taxes to distribute a meaningful reward to those who have provided the capital for its construction.
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From an investor’s perspective, the timing of the United Modi Hydropower Dividend is particularly relevant as the market looks for stable income-generating assets. Hydropower stocks are often viewed as a hedge against inflation in Nepal, given their long term contracts and the essential nature of electricity. The relatively low cash component of 0.36842 percent is a common practice among Nepali hydropower firms, as it covers the 5 percent dividend tax required by the government, ensuring that shareholders do not have to pay the tax out of their own pockets when the bonus shares are credited to their demat accounts. This administrative convenience is highly appreciated by the investing public, especially those who hold shares in multiple companies across the energy sector.
Furthermore, the increase in paid up capital through the issuance of bonus shares will improve the company’s debt to equity ratio. A stronger equity base enhances the company’s creditworthiness, making it easier to secure financing for future cascade projects or upgrades. As Nepal moves toward a more integrated regional energy market, with increasing exports to India and Bangladesh, companies like United Modi are positioning themselves to be more robust and scalable. The successful conclusion of the 12th AGM and the subsequent listing of the new bonus shares on the Nepal Stock Exchange will mark the final steps in this year’s dividend cycle, providing a clear path for the company’s growth in the coming fiscal year.
In conclusion, the United Modi Hydropower Dividend proposal of 7 percent bonus shares and a small cash component is a balanced and strategic move by the board of directors. It rewards the loyalty of the shareholders while ensuring that the company retains the necessary capital to remain competitive and operationally sound. As the approval process begins with the Electricity Regulatory Commission and moves toward the 12th Annual General Meeting, investors are advised to keep their demat accounts active and monitor the book closure dates to ensure they are eligible for the distribution. This announcement reinforces the role of hydropower as a pillar of the Nepali capital market and a vital contributor to the nation’s economic prosperity.
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