NEPSE explained

Dividends and book closure, explained

A dividend is a share of the company's profit paid to shareholders — as cash, bonus shares, or both. In Nepal the dividend % is calculated on the face value (usually Rs 100), not the market price, and 5% tax is withheld.

नेपालीमा पढ्नुहोस्

Dividend % is on face value

A "10% cash dividend" on a Rs 100 face-value share is Rs 10 per share, whatever the market price is.

Announcement	You hold 100 shares (Rs 100 face value)	After tax
10% cash dividend	Rs 1,000 cash	Rs 950 (after 5% tax)
20% bonus share	20 new shares	Tax 5% × Rs 2,000 face value = Rs 100
20% bonus + 1.0526% cash	20 shares + Rs 105.26	Exactly covers the Rs 100 bonus tax plus 5% tax on the cash itself

That's why many companies announce a small cash dividend alongside a bonus — it's there to pay the bonus tax.

What is book closure?

Book closure is when the company freezes its shareholder register to decide who receives the dividend, bonus or right. If your shares are settled in your demat before the book-closure date, you're on the list.

Because settlement is T+2, a purchase made on the last day or two before book closure may not settle in time. Ask your broker for the last trading day that qualifies — don't guess.

Selling right after book closure doesn't cancel your entitlement — eligibility is fixed on the book-closure date.

From announcement to your account

The board proposes a dividend (cash and/or bonus).
The AGM approves it (banks and financial institutions also need Nepal Rastra Bank's approval first).
The company announces the book-closure date.
Cash goes to the bank account linked to your demat; bonus shares are credited to your demat and listed later.
NEPSE adjusts the market price for bonus/right shares after book closure — try the bonus calculator.

Frequently asked questions

Is the dividend % on market price?

No. It's on face value — usually Rs 100 per share. A 15% cash dividend = Rs 15 per share.

How much tax is charged on dividends?

5% is withheld on cash dividends and on bonus shares (on face value) for individual shareholders.

What is book closure?

The date the company fixes its register of shareholders entitled to a dividend, bonus or right. Your purchase must have settled in your demat by then.

Where do I receive the cash dividend?

In the bank account linked to your demat account. Keep it active and the details updated with your DP.

Sources

Facts on this page last verified 6 October 2026.

Sector-wise dividend distribution: companies pay cash dividend for tax on bonus shares — ShareSansar
Know about bonus & right share calculation after adjustment — ShareSansar
T+2 to be implemented from today — what changes in the settlement process — Merolagani
CDS and Clearing Ltd. — notices & circulars — CDSC

General information for learning only — not investment, tax or legal advice, and not a recommendation to buy or sell any security. Rules and fees change: the latest notices from NEPSE, SEBON, CDSC, IRD and your own broker/DP are final.

Keep going

IPO vs FPO vs right vs bonusThe four issue types Bonus share calculatorPrice after adjustment T+2 settlementWhy timing matters

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