In recent weeks, investors have shown increasing interest in the shares of reinsurance companies on Nepal Stock Exchange Limited (NEPSE). Over the past week, Himalayan Reinsurance has consistently recorded the highest transaction value, accompanied by a steady rise in its share price. On February 20, however, Nepal Reinsurance Company led in transaction value, having also taken the lead on February 17. This trend highlights strong investor attraction toward reinsurance stocks.
Not only have these companies led in transaction volume, but their share prices have also surged. Since mid-February, the stock market has shown an upward trend, with both reinsurance companies experiencing price gains. In mid-February, Nepal Reinsurance Company’s share price stood at Rs 974.75 per unit, which climbed to Rs 1,304 by February 25. Similarly, Himalayan Reinsurance Company's share price rose from Rs 849 per unit to Rs 1,025 during the same period. This represents an increase of Rs 329.25 for Nepal Reinsurance and Rs 176 for Himalayan Reinsurance.
As of now, only two reinsurance companies operate in Nepal. According to Chhote Lal Rauniyar, former president of the Nepal Investors Forum, investors remain attracted to these companies due to their strong financial standing. Additionally, their ongoing capital expansion plans, which include issuing bonus and rights shares, have further fueled investor interest.
Rauniyar pointed out that Nepal Reinsurance had previously traded above Rs 2,000 per share, and the belief that it could reach those levels again has encouraged investors to buy its stock. Meanwhile, Himalayan Reinsurance is preparing to issue an 80% rights share, while Nepal Reinsurance is also expected to increase capital through rights and bonus shares. Investors anticipate these developments and are actively purchasing shares in both companies.
By mid-February 2026, both reinsurance companies must meet the regulatory capital requirement of Rs 20 billion each. Initially, they were given a deadline until mid-February 2025, but as it became clear that they would not meet the requirement in time, the Nepal Insurance Authority extended the deadline by one year.
Both companies have submitted capital expansion plans to the regulatory body, mainly relying on bonus and rights shares. Acknowledging that the process takes time, the Insurance Authority granted them an extension, directing them to meet the capital requirement within the additional period.
Currently, Nepal Reinsurance Company has a paid-up capital of Rs 13.42 billion, while Himalayan Reinsurance Company has Rs 10.40 billion. To meet the revised capital requirement, Nepal Reinsurance Company needs an additional Rs 6.57 billion, whereas Himalayan Reinsurance Company requires Rs 9.50 billion.
Himalayan Reinsurance Company is set to issue an 80% rights share, having already secured approval during its Annual General Meeting on March 3, 2024. The company plans to issue rights shares worth Rs 8.32 billion, bringing its paid-up capital to Rs 18.72 billion after the issuance. However, even after issuance of rights shares, Himalayan Reinsurance Company will still need an additional Rs 1.2 billion to meet the regulatory capital requirement.
