Bonus and Right Share Price Adjustment in NEPSE: Formulas and Examples

You check your portfolio one morning and a stock you hold is down 17%. No bad news, no market crash, nothing in the headlines. Before panicking, check the corporate actions. Very often the company has just closed its books for a bonus or right share, and NEPSE has adjusted the price to reflect the new shares.

The price adjustment is not a loss. Your number of shares goes up, and the value of your holding stays roughly the same. This guide explains why the adjustment happens, how NEPSE calculates it, and how to work it out yourself.

Why prices adjust after bonus and right shares

A company's value does not change just because it issues more shares. If a company worth Rs. 600 crore with 1 crore shares issues a 20% bonus, it now has 1.2 crore shares and is still worth about Rs. 600 crore. Each share now represents a smaller slice, so the price per share has to come down.

NEPSE applies the adjustment on the first trading day after the book closure date, so the price you see that morning already reflects the new share count.

Bonus share price adjustment

Example: a stock trades at Rs. 600 and the company declares a 20% bonus share.

Adjusted price = 600 / 1.20 = Rs. 500

If you held 100 shares worth Rs. 60,000, you now hold 120 shares worth Rs. 500 each, which is still Rs. 60,000.

Right share price adjustment

Right shares are different because you pay for them, usually at Rs. 100 per share. The adjustment takes that payment into account:

Example: a stock trades at Rs. 300 and the company announces a 50% right share at Rs. 100.

Adjusted price = (300 + 0.50 x 100) / 1.50 = 350 / 1.50 = Rs. 233.33

If you held 100 shares worth Rs. 30,000 and subscribe to your 50 right shares for Rs. 5,000, you end up with 150 shares worth about Rs. 35,000, which matches your Rs. 30,000 plus the Rs. 5,000 you paid.

What about cash dividends?

Cash dividends are paid out of the company's cash, so in theory the share should be worth a little less afterwards. In practice, NEPSE's adjustments focus on bonus and right shares, and cash dividends usually do not trigger a separate price adjustment unless they are large relative to the share price. Check the NEPSE notice for the specific company if you are unsure. Our guide to dividends in Nepal covers book closure and dividend tax.

How to be eligible for bonus and right shares

• Your shares must be in your demat account by the book closure date.
• Because trades take a couple of days to settle, buy early enough for settlement to finish before book closure.
• Shares bought on or after the adjustment day are not eligible for that bonus or right.

What the adjustment means for your WACC and tax

New bonus and right shares change your share count and your average cost in MeroShare. Check your purchase source after every corporate action so your capital gains tax is calculated correctly. Our WACC guide explains how.

Frequently asked questions

Did I lose money when the price dropped after a bonus?

No. You received extra shares, so the total value of your holding stays about the same.

When does NEPSE adjust the price?

On the first trading day after the book closure date.

What if I do not apply for right shares?

The price still adjusts, but you do not get the new shares, so your holding loses value. Apply before the deadline if you want to keep your stake.

How do I calculate the adjusted price quickly?

Use the free Adjustment calculator in ShareHub. Choose Bonus or Right, enter the price and percentage, and it shows the adjusted price.