Himalayan Reinsurance Company IPO is coming shortly in a few months. This is the biggest upcoming IPO in Nepal after NIFRA. The official news regarding the release of IPO has been conformed recently and it is yet to be listed in the SEBON IPO pipeline.


Himalayan Reinsurance Company

Himalayan Reinsurance Company is a private sector reinsurance company that provides the service of reinsurance of life and general insurance company nationally and internationally.

It has 70% of paid-up capital and 30% is yet to be collected issuing IPO. The topmost commercial banks of Nepal owned by the government of Nepal named Nepal Bank Ltd, and Rastriya Banijay Bank Ltd are also the promoters of the Himalayan Reinsurance Company.

What is Reinsurance?

Reinsurance is the insurance of the insurer. In General, if any insurance company gets its insurance from any company then the insurer of the insurance company is known as a reinsurance company.

As the insurance company also has to bear the risks, the insurance company also ensures itself in reinsurance company. Himalayan Reinsurance Company is an example of a reinsurance company.

Himalayan Reinsurance Company to issue IPO

Himalayan Reinsurance Company is going to issue 3,00,00,00,000 units of share for public offering. This IPO is going to be the biggest IPO in Nepal after the NIFRA's IPO. 

It is almost sure that no one applying for this IPO will have to return without shares. We will make a small case study of why this IPO will be beneficial for all Demat account holders.

Case Study of Himalayan Reinsurance Company's IPO

We have the data of around 22 lakh Demat account holders who apply for IPO. Himalayan Reinsurance Company is issuing 3.00,00,00,000 units of shares. If we deduct 5% of the total units of shares for mutual funds and 5% of total units of shares to its employee then it almost lefts 2,70,00,00,000 units of shares.

When all the Demat holders apply for this IPO there will be the chance of getting more than 10 units for each. Let's calculate. Divide the total units left for general with total numbers of assumed applicants and again divide it by 100. We are assuming there are 22 lakh applicants applying for IPO currently.

From the calculation, there is the tendency of getting 12.3 shares by a person if all the persons with Demat accounts apply for this IPO. If this happens actually each and every person who applies this IPO will get the minimum unit of shares or more than 10 units of shares.

There would arise a question, What if the Demat account holder increases till the issue of this IPO? 

This is a good concern because this is an upcoming IPO and we are assuming the allocation with current data. Let's consider the expected data. What do you expect the number of Demat account holders to be in a few months? It may increase up to 24 lakhs from 22 lakhs.

We are now getting 12.3 units of share when 22 lakhs applies for the IPO what if when 24 lakhs people apply for the IPO? 

We are still getting the tendency of 11.25 units of share per person. That means Himalayan Reinsurance Company IPO is going to be allocated to each and every applicant.

This is really good news for the IPO investors. As our study and assumption go right you will definitely get this IPO.

How many units of share to apply?

You have to apply 20 units share for this IPO. It is because the chance of getting an IPO per person is more than 10. When there is the chance of getting more than 10 units shares then you must apply for 20 to get the full benefit of the biggest IPO. 

If you wish to apply for just 10 units then you can apply, it's all your choice. But there is the chance of getting at least 11 to 12 units hence you should have to apply for a 20 unit share to get that.

Official Notice for issuing IPO

You can see the official notice of Himalayan Reinsurance Company about its upcoming IPO. The company has stated that the paid-up capital will be Rs 10 billion. Out of Rs 10 billion, Rs 7 billion will have to be issued by the founders and the remaining Rs 3 billion will have to be issued to the public.

When will this IPO come?

One of the biggest IPOs in the Nepali primary share market is expected to come within 3 months. Himalayan Reinsurance company has not applied in SEBON to issue IPO yet but it is going to start the process soon.

We will add more about this IPO when the source confirms the details. 


I hope you loved this article. We will be providing news about other upcoming IPOs in Nepal in the future. If you have any confusion about the case study, you can ask your question in the comment section.

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