Beginner · Dividends
Dividends, Bonus Shares and Book Closure
Cash dividend and bonus shares, the dates that matter, why the price drops after book closure, dividend yield and right shares.
On this page · विषयसूची
1. Cash dividend and bonus shares
A dividend (लाभांश) is part of a company's profit given to shareholders. In Nepal it comes as a cash dividend (money to your bank account), bonus shares (free new shares), or both. Percentages are on the face value of Rs. 100.
Tax on dividends is handled by the company before you receive them; for bonus shares, SEBON now makes the company responsible for that tax.
2. The important dates
- Board proposes the dividend after the year's results.
- AGM (annual general meeting) of shareholders approves it.
- Book closure: the company fixes who gets the dividend. You must own the share before the book closure date (remember T+2).
- Distribution: cash comes to the bank account linked to your Demat; bonus shares come to your Demat.
3. Why the price drops after book closure
On the book closure date NEPSE adjusts the price, because the value has moved to you:
| Action | Adjusted price | Example (price Rs. 600) |
|---|---|---|
| Cash dividend | Price − cash per share | 10% cash (Rs. 10) → Rs. 590 |
| Bonus share | Price ÷ (1 + bonus %) | 20% bonus → 600 ÷ 1.20 = Rs. 500 |
| Right share | (Price + right price × ratio) ÷ (1 + ratio) | 1:1 at Rs. 100 → (600 + 100) ÷ 2 = Rs. 350 |
4. Dividend yield
Dividend yield = cash dividend per share ÷ share price × 100.
A very high yield after a big price fall can be a warning sign: check whether profit can keep paying it.
5. Right shares: apply or not?
When a company issues right shares, existing shareholders get the right to buy new shares, usually at Rs. 100. You apply through MeroShare in the given time. If you don't apply, your holding becomes a smaller part of the company and the price adjusts down, so decide carefully.