Bonus share and right share in Nepal: meaning, price adjustment and tax

A bonus share (बोनस सेयर) is a new share a company gives its shareholders free, out of profit it has kept, in proportion to what they already hold: a 10% bonus gives 10 new shares for every 100. A right share (हकप्रद सेयर) is a new share the existing holders have the right to buy, in a fixed ratio and at a set price, usually the face value of Rs 100, before anyone else can.

Both add shares, both are proposed by the board and approved by the shareholders, and both go only to people who hold the share on the book-closure date. The difference is money. A bonus moves profit that is already inside the company into share capital, and costs you only a 5% tax. A right brings new money in, from you.

A company announces a book closure (बुक क्लोज) date, when it freezes its register of shareholders to see who receives the bonus, the right or the cash. To be on that register you must hold the share at the end of the last trading day before the book-closure date. Since NEPSE moved to a Monday-to-Friday week in April 2026, a book closure on a Monday means holding by the Friday before: Global IME Bank and Nepal Lube Oil closed their books on Monday 21 September 2026, and NEPSE adjusted both prices after Friday's trading.

Buying on that last day counts even though the shares settle two days later (T+2). That is what every company notice says, though we found no NEPSE or CDSC rule that states it. Selling on or after the book-closure date does not take away an entitlement already fixed.

The order differs for the two. A bonus is usually adjusted before the AGM has even voted on it: Shangrila Development Bank's price was adjusted on 23 September 2026 for a bonus its AGM, called for Ashwin 22, 2083, was still to approve. A right issue has its book closure only after the general meeting and SEBON have approved it. The cash part of a dividend, its tax and when it is paid are in the dividend guide.

A bonus is a way to reward shareholders without paying out cash. Under the Companies Act 2063 (section 179), a company may turn profit it has kept into new shares if its general meeting approves. This is called capitalising profit: the money moves from retained earnings to paid-up capital (चुक्ता पुँजी) on the same balance sheet, and nothing leaves the company. The Income Tax Act counts it as a distribution of profit (section 53, whose explanation names bonus shares), which is why it is taxed like a dividend.

Companies in Nepal do it for four reasons:

• To meet a capital rule. Nepal Rastra Bank sets a minimum paid-up capital for each class of bank and financial institution: Rs 8 arba for commercial banks and Rs 2.5 arba for national-level development banks, with a deadline of mid-July 2017. A bank that missed it was barred from paying cash or bonus dividends and told to merge. Bonus and right shares were how most of them got there.
• To keep cash in the business for loans, a hydropower project or expansion, while still giving shareholders something on AGM day.
• To make the share look cheaper. A lower price after the adjustment can draw small buyers, and more shares in issue can mean more trading.
• Because shareholders ask for it. Many investors in Nepal read a large bonus as a good year. The percentage is a decision about the form of the payout, not proof of profit.

After the last trading day before book closure, NEPSE lowers the share's price so that the holding is worth the same with the extra shares. The formula, which every real case below fits:

Adjusted price = closing price on the last trading day ÷ (1 + bonus %)

Snow Rivers closed at Rs 945 before its 10% bonus in September 2026. Rs 945 ÷ 1.10 = Rs 859.09, the adjusted price NEPSE published. A holder of 100 shares had Rs 94,500 the evening before; once the 10 bonus shares arrive, 110 shares at Rs 859.09 are worth Rs 94,500.

A bonus moves value; it does not add any. The company owns exactly what it owned the day before, now cut into more pieces. Your share of it is the same.

• Your portfolio will look as if it fell. The price drops at book closure, but the bonus shares reach your demat account weeks or months later. Until then MeroShare shows 100 shares at Rs 859.09, Rs 85,909. Nothing is lost: the 10 shares are owed to you.
• The cash part does not move the price. Shangrila Development Bank declared 4% bonus and 6.5263% cash; NEPSE divided its Rs 428 by 1.04 exactly, to Rs 411.54, and left the cash alone. That is our arithmetic from the published prices, not a rule NEPSE has stated.
• The adjustment is a starting point, not a forecast. From the next morning the market sets the price. It can climb back above the old one or keep falling.
• Bonus share calculation for your own holding: your shares × bonus % = new shares; your shares × the closing price = the value, which stays the same. The dividend calculator works it out for any holding, with the cash and the tax.

Each row takes the closing price NEPSE used, applies the formula in code, and compares the answer with the price NEPSE published. All 7 match to the paisa. They are the cases whose numbers were published, not a list of shares to buy.

On the day, a bonus is neutral: the holding is worth the same, less the 5% tax. Over the years it matters in four ways.

• Future cash on more shares. If the company keeps paying the same cash percentage on the bigger capital, your cash grows: a 10% cash dividend on 110 shares is Rs 1,100 instead of Rs 1,000. That needs the profit to grow too.
• Sometimes a sign of confidence. A board that capitalises profit expects to earn on the bigger base. A board pushed by a capital rule may only be meeting the rule.
• EPS falls unless profit grows. After a 20% bonus, the same profit means 16.7% lower EPS. A price that looks cheap against last year's EPS may not be cheap against the adjusted one.
• The tax is real money: Rs 5 a share, paid from a cash dividend or from your pocket, on value that was already yours.

The Income Tax Act 2058 counts a bonus issue as a distribution of profit (section 53), taxes a dividend at 5% (section 88(2)(क)), and makes it a final tax withheld by the company (section 92). In practice the base is the bonus shares' face value: Rs 5 for each bonus share. A 10% bonus on 100 shares is 10 shares and Rs 50 of tax.

Most companies collect it by declaring a small cash dividend for tax beside the bonus, sized so that the tax on the whole payout is exactly 5% of it. For a bonus of b%, that cash is b × 5 ÷ 95, or b ÷ 19, % of face value. That is where the odd decimals in dividend notices come from.

• When the cash is only for tax, nothing reaches your bank. Bikash Hydropower's 0.5263% on 100 shares is Rs 52.63, and 5% of the Rs 1,000 bonus plus that cash is Rs 52.63: you receive nothing, and owe nothing.
• When there is more cash, the declared total is grossed up. Shangrila Development Bank's 4% bonus and 6.5263% cash add to 10.5263%; 5% of that is 0.5263%, so holders net exactly 6% in cash and 4% in shares. On 100 shares: 4 bonus shares, Rs 652.63 of cash, Rs 52.63 of tax, Rs 600 paid to you.

When a company declares only a bonus, or too little cash to cover the tax, it or its share registrar (RTA) asks shareholders to pay the tax before the bonus shares are credited. Nepal Insurance did so in 2019 and Himalayan Life in May 2025, by the notices we found. The sum is Rs 5 for each bonus share.

1. 1Find the notice: on the company's website, its RTA's, or ShareSansar's announcements. It names the amount, the bank account and the deadline.
2. 2Work out the sum: your bonus shares × Rs 5. On a 15% bonus on 200 shares, 30 shares and Rs 150.
3. 3Pay the way the notice says, quoting your name and 16-digit BOID, before the deadline.
4. 4Keep the voucher, and send or hand it in if the notice asks.
5. 5Check MeroShare after the credit date for the new quantity.

A bonus percentage rarely divides every holding into whole shares. 125 shares with Barun Hydropower's 4.75% bonus would be 5.9375 new shares. The part after the point is a fractional share (भिन्नाङ्क सेयर).

We found no NEPSE or CDSC rule that says how fractions are handled, and practice has varied by company. Two things we did find: NEPSE listed 45,14,381.60 bonus units of Nepal Life in August 2026, so fractions do reach the register; and in April 2016 Nepal Investment Bank asked holders to deposit an extra amount to round the fraction of its 33% bonus up to a whole share.

• Read the company's bonus notice for what it does with fractions.
• Look at the quantity in MeroShare's My Shares after the credit; it may show a decimal.
• Ask your broker before counting on selling a fraction. Lots of fewer than 10 shares do not show in TMS, and a fraction is smaller still.

There is nothing to apply for. After the AGM approves the bonus, the company registers the new shares with SEBON (SEBON's site lists them under Bonus Share Registered), NEPSE lists them, and CDSC credits them directly to every eligible demat account. The company then publishes a notice that the bonus has been distributed to demat accounts. The gap from book closure can be weeks or months.

• Where to see them: MeroShare, My Shares for the new quantity and My Transaction History for the credit.
• Paper certificates have to be dematerialised first.
• If the tax was not covered by cash, pay it first (above).
• Their 365 days start when they arrive. For capital gains tax, bonus shares are a new lot: until a year after the credit they count as held 365 days or less, whenever you bought the original shares.
• Check their cost. In My Purchase Source the bonus shares should carry Rs 100 a share (see selling, below).

A right issue raises new capital from the people who already own the company. Each holder on the register at book closure may buy new shares in a ratio, at a subscription price set by the company, usually the face value of Rs 100, whatever the share trades at. SEBON must approve the issue; its site lists the issues waiting and the ones approved.

Ratios are written as held to new. United Ajod Insurance's 100:10 in 2026 is 10 new shares for every 100 held, a 10% right. Buddha Bhumi Nepal Hydropower's 1:1 is one for one, 100%. Nepal Insurance's 10:3.4783 in 2025 is 34.783%.

Companies issue rights to meet a regulator's capital requirement (banks and insurers), to pay for a project (hydropower companies, often), or to repair a balance sheet after losses. The offer document says which. Because the subscription price is usually far below the market price, a right has real value, but only to a holder who pays for it.

Right shares are applied for on the same screen as an IPO, explained in the IPO guide. You need the shares in your demat account at book closure, a MeroShare login, a bank account registered for C-ASBA with its CRN, and the money in that account. If you have none of these yet, the demat guide starts there. Four things to know first, then the steps.

• MeroShare is one of three ways in. You can also apply at a C-ASBA bank branch, or on a paper form at the issue manager (निष्कासन प्रबन्धक)'s office, as Nepal Insurance's right issue allowed in August 2025. The steps below are for MeroShare.
• The window is short. Each issue states its dates: Buddha Bhumi's ran from Chaitra 22 to Baisakh 28, 2083, Himalayan Power Partner's from Baisakh 19 to Jestha 6, 2083. Miss it and the right lapses.
• Edit before it closes; you cannot withdraw. MeroShare has Edit and Reapply and no function to cancel an application.
• No lottery. Unlike an IPO, every valid application gets the units applied for, up to the eligibility.

1. 1Log in to MeroShare and open My ASBA. Current Issue lists every open issue, including right issues of companies you do not hold. Find the company's issue, marked Share Type RIGHT SHARE, and press Apply.
2. 2MeroShare checks your BOID against the company's register and shows Right Kitta Eligibility: the most units you may apply for.
3. 3Choose your Bank, then Account Number and Branch.
4. 4Enter Applied Kitta, up to your eligibility. MeroShare works out the Amount as units × the subscription price, and that sum is blocked in your bank account.
5. 5Enter your CRN, tick the declaration and press Proceed.
6. 6Enter your 4-digit transaction PIN and press Apply. Application Report shows its status.

When a right issue's book closes, NEPSE adjusts the price for the new shares coming in at the subscription price. The result is what textbooks call the theoretical ex-rights price:

Adjusted price = (closing price + subscription price × right %) ÷ (1 + right %)

Himalayan Power Partner closed at Rs 522 before its 50% right at Rs 100. (Rs 522 + Rs 100 × 0.5) ÷ 1.5 = Rs 381.33, the price NEPSE published on 23 March 2026. Read it as an average: for every 100 old shares at Rs 522, 50 new ones come in at Rs 100, and 150 shares worth Rs 57,200 average out at Rs 381.33.

So each right is worth the adjusted price less what it costs: Rs 381.33 − Rs 100 = Rs 281.33 a right share. That is what a holder gives up by not applying.

A right that is not taken up simply lapses: you pay nothing, and nobody pays you for it. The price is adjusted for everyone at book closure, so a holder who does not subscribe ends up with the same number of shares at the lower price, and a smaller slice of a company that has more shares. This is dilution.

Two neighbours each hold 100 Himalayan Power Partner shares at the March 2026 close of Rs 522. One applies for her 50 right shares and pays Rs 5,000. The other does not.

• The loss is the rights let go: 50 × Rs 281.33 = Rs 14,067.
• The market moves both holdings alike after book closure, up or down; the gap between the two neighbours stays.
• The unsold shares do not vanish. They are auctioned, and the money goes to the company. As far as we could find, nothing is paid to holders whose rights lapsed.

This guide does not say whether to subscribe to any issue; we are not licensed investment advisers. These are the questions that decide it.

• How far above the subscription price is the share? The further above, the more a skipped right costs you, as worked above. Near Rs 100, the right is worth little either way.
• Why is the company raising money? The offer document says: a capital rule, a project, or losses to cover. Paying in to repair losses is a different bet from paying in to fund growth.
• Can it earn on the new money? EPS falls after a right as it does after a bonus, unless profit grows with the capital.
• Can you pay without borrowing? Money you will need for rent, fees or an emergency should not go into one company's shares.
• Do you want more of this company? A right is a new purchase. The discount is not a gift; it is already counted in the adjusted price.

In some markets a holder who does not want the new shares can sell the right itself, which is called renouncing it, so its value is not lost. In Nepal we found no way to renounce or sell a right as of November 2026. NEPSE proposed bylaws for renouncing rights in 2008 and again in 2014; neither took effect, and a private market in rights was described at the time as legally forbidden. We found nothing since that allows it.

So in Nepal a right has two outcomes: you pay for it, or it lapses and its value goes to whoever buys the shares in the auction. If SEBON or NEPSE changes this, it will be announced; check before you rely on this paragraph.

Right shares that no one applied for are sold by auction (लिलामी): a sealed-bid sale open to individuals and institutions, under SEBON's Securities Issuance and Allotment Directive, 2074. The issue manager publishes a notice in national dailies with the units, the minimum price, the minimum bid size and the dates.

Two from 2083. Buddha Bhumi Nepal Hydropower's 1:1 right of 40,00,000 units drew applications for 35,25,304 (88.13%); the other 4,74,696 were auctioned from Jestha 21 to 29 at a minimum bid of Rs 100 and at least 100 units. Himalayan Power Partner auctioned 4,68,740 unsubscribed right shares from Jestha 27 to Asar 4, with forms at Global IME Capital and 14 Global IME Bank branches.

1. 1Find the notice: in national dailies, on the issue manager's site, or on ShareSansar's auction list.
2. 2Get the form from the issue manager or the bank branches the notice lists.
3. 3Fill in the units and your price per unit, at least the minimum of each.
4. 4Pay what the notice asks into the named account, or attach a good-for-payment cheque.
5. 5Attach the documents: a copy of your citizenship, a photo, the deposit voucher or cheque, your demat (BOID) details and PAN if asked.
6. 6Seal the envelope and hand it in before the deadline.
7. 7Wait for the opening. Bids are opened in public and a cut-off price is set from them. Bids at or above it get shares; bids below it are refunded.

Some companies announce a bonus and a right in the same season; Sahas Urja declared a 21% bonus and planned a 100% right in November 2025. NEPSE has not published one formula for the two together. What it did in Miteri Development Bank's case was adjust for the right first, then for the bonus on the capital after the right.

Miteri declared a 30% bonus worth Rs 6.33 crore. That was 30% of its capital before the right (Rs 21.10 crore) but only 20% of its capital after it (Rs 31.65 crore, 50% more), so NEPSE adjusted the price for a 20% bonus. The capital figures are our arithmetic from the published ones.

The same order worked on one holding: a share at Rs 500, a 50% right at Rs 100, then a 30% bonus declared on the capital before the right, which is 20% of the capital after it.

For capital gains tax (पुँजीगत लाभ कर) a bonus share and a right share each count at a cost of Rs 100, the face value. The Inland Revenue Department told NEPSE to use face value in June 2018 (Jestha 2075). After objections the Finance Ministry formed a working group and told the market to carry on as before until it reported; we found no later rule. Current guides (Punji's, October 2026) say MeroShare counts a bonus share at Rs 100 in your WACC, and a right share's Rs 100 is in any case what you paid.

The tax is 3.75% of the gain on shares held more than 365 days and 5% on shares held 365 days or less, for resident individuals since 22 September 2026. The gain is the sale value after charges, less the cost. Bonus shares are a lot of their own, so their days start when they reach your demat account.

• Bonus shares pull your average cost down. 100 Snow Rivers shares bought at Rs 945 cost Rs 94,851.03 with commission, SEBON fee and DP charge, Rs 948.51 a share. Add 10 bonus shares at Rs 100 and MeroShare's WACC becomes Rs 871.37.
• Sold together at the adjusted price, all 110 shares show a loss of Rs 1,702.15, so no tax. That is the charges on both trades plus the Rs 100 counted as the cost of each bonus share, which cost you only Rs 5 in tax.
• Check My Purchase Source before you confirm EDIS. A wrong cost changes the tax, and fixing it later takes CDSC's WACC Reset form at Rs 100 a company.
• Right shares can be sold once they are listed and in your demat account, like any other share.

These are the questions people ask most about bonus and right shares, and the honest answer is a place to look, not a name. AGMs have to be held within 6 months of the year's end in mid-July, so most bonuses are proposed between Shrawan and Poush, and the lists change every week of that season. A table here would be out of date within days. These are the pages that stay current (all checked 3 November 2026):

• Bonus and cash dividends proposed: ShareSansar's proposed dividend list, whose latest entry was 2 November 2026; NepaliPaisa's dividend page for a company's history.
• Bonus shares registered: SEBON's Bonus Share Registered list, by fiscal year.
• Right shares coming: SEBON's Right Share Application List, the issues waiting for approval (latest file dated 2083-06-27, 13 October 2026), and Right Share Approved.
• Right issues open now: the Right Share tab of ShareSansar's existing issues, and MeroShare's Current Issue.
• Auctions: ShareSansar's auction list.

Company notices and the news use these words in both languages, and people search for them in both spellings: सेयर and शेयर.