Nepal Life Insurance (NLIC) Calls AGM and Proposes Stock-Split: What Does This Mean?

Nepal Life Insurance Company Limited (NLIC) has called its 20th AGM on Magh 28, i.e. February 10, 2021. The AGM will be held in Birgunj, starting at 9 am that day.

Among other proposals, the AGM will endorse the dividend for the fiscal year 2075/76. The insurance company has proposed a 51% dividend for the fiscal year 2075/76. The bank's 311th meeting of the board held on Poush 07 has proposed a 20% cash dividend and 31% bonus shares from the existing paid-up capital. The paid-up capital of the company is Rs. 5.49 arba.

Furthermore, the AGM will endorse a 2-for-1 stock split. This means that the face value of each share will be Rs. 50 compared to Rs. 100 maintained at present. In a 2-for-1 stock split, an additional share is given for each share held by a shareholder. This happens automatically since the company halves its face value for each stock.

The primary motive of a stock split is to make shares seem more affordable to small investors. As of writing, the closing price of NLIC is Rs. 2,465. Note that this proposal must be approved by the regulatory body after NLIC endorses the decision in its AGM.

The book closure date is announced on Magh 14. Thus, investors maintained before that day are entitled to the dividend and can also attend the AGM. Books will be closed from Magh 14 to Magh 28.

AGM notice