Nepal reinsurance to auction 2.17 million founder shares via sealed bid process

KATHMANDU: Nepal Reinsurance Company Limited has put 2,171,935 units of founder group shares up for auction through a sealed bid process, opening a significant block investment opportunity in Nepal’s reinsurance sector.

The company announced that the founder category shares are being divested in accordance with prevailing legal provisions and internal share transfer procedures.

The auction will be conducted through a competitive bidding mechanism, with Nabil Investment Banking Limited, Naxal, Kathmandu, appointed as the sales manager for the transaction.

According to the offer details, the minimum bid price has been fixed at Rs 400 per share, setting the floor valuation for participation.

Investors must apply for a minimum of 100,000 shares, making the offering primarily targeted toward institutional investors, large firms, and high-net-worth participants capable of making substantial equity commitments.

Eligible participants in the auction include existing founder shareholders of Nepal Reinsurance Company as well as individuals, firms, companies, and institutions that meet legal and regulatory eligibility requirements under Nepal’s corporate and financial sector laws.

The company has clarified that all applicants must comply strictly with the criteria set for founder share ownership, which typically includes fit-and-proper standards and sector-specific regulatory provisions.

Interested investors are required to submit sealed bids along with all necessary documentation within the stipulated deadline to the office of the sales manager.

The bid must clearly mention the proposed purchase price and the number of shares sought, subject to the minimum threshold. Applications that fail to meet procedural, documentary, or eligibility requirements will be automatically rejected.

Nepal Reinsurance stated that the auction process will be governed entirely by prevailing laws, regulations, and internal company provisions.

The sales manager retains full authority over the execution and management of the auction process, including bid evaluation, compliance verification, and final allocation, in line with legal mandates.

The move is seen as part of the broader capital restructuring and ownership adjustment process within the company’s founder group.

Founder shares in financial institutions often carry strategic value, including influence over governance and long-term institutional direction, making such auctions closely watched in Nepal’s capital market and insurance industry circles.

As Nepal’s sole domestic reinsurance company, Nepal Reinsurance plays a critical role in risk retention, insurance market stability, and foreign currency conservation by reducing outward reinsurance payments.

Any shift in founder shareholding structure is therefore viewed as having governance and sectoral significance beyond routine equity transactions.

Market analysts note that the minimum price of Rs 400 per share and the large lot requirement suggest the offering is designed to attract serious long-term investors rather than small retail participants.

The sealed bid format allows price discovery while ensuring confidentiality and competitive participation.

The company has also made it clear that bids not submitted in accordance with the prescribed terms and procedures will be deemed invalid without further review.

This includes incomplete documentation, non-compliance with eligibility standards, or failure to adhere to submission guidelines.

With the auction now open, investor interest is expected from within the financial services sector, insurance-linked institutions, and corporate investment entities seeking strategic exposure to Nepal’s reinsurance market.

Further details regarding deadlines, documentation, and procedural conditions are available through the sales manager.