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Himalayan Reinsurance (HRL) — Investment Report

Himalayan Reinsurance is one of Nepal's two domestic reinsurers, listed on NEPSE in January 2024. The company carries an AM Best B+ rating and reported a combined ratio of 79.72% in FY 2080/81. Since March 2026, the company has been at the centre of a money-laundering investigation involving a major promoter, with the NIA reviewing its status under Section 101 of the Insurance Act 2079.

May 10, 202616 min

Business Profile

Item Detail
Incorporated 2021
Commercial operations began FY 2077/78 (2020/21)
NEPSE listed 7 January 2024
IPO price NPR 100 par
Domestic rating ICRANP-IR A (Stable) — ICRA Nepal, July 2023
International rating AM Best B+ (Good), Stable — reaffirmed January 2024
Ownership structure ~70% promoters, ~30% public (per HRL public disclosures)

Key promoter / shareholder names referenced in public reporting: Shekhar Golchha (resigned Chairman, March 2026), Deepak Bhatta (arrested April 2, 2026), Sulabh Agrawal, Nepal Bank Ltd. (~7.14%), Rastriya Banijya Bank (~7.14%), Amber Provestment (~9.69%), and entities of the Jagdamba Motors / Steels group (~7.71% combined).

Financial Trajectory

Source: HRL Annual Reports FY 2077/78–FY 2080/81 and Q4 FY 2081/82 unaudited disclosures.

Metric FY 77/78 FY 78/79 FY 79/80 FY 80/81 FY 81/82 (Q4)
Paid-up capital (NPR bn) 7.00 7.00 7.00 10.40 10.40
Net worth (NPR bn) 7.01 7.30 7.95 15.34 —
Total assets (NPR bn) 7.01 8.10 12.92 21.40 —
Gross earned premium (NPR M) 164 869 3,300 5,848 —
Net earned premium (NPR M) 164 772 2,987 5,431 —
Premiums ceded (NPR M) — 97 313 417 —
Investment income (NPR M) 24 532 807 1,158 —
Net profit (NPR M) 9.4 292 649 1,314 1,390
EPS (NPR) 0.13 4.17 9.28 12.63 12.79
BVPS (NPR) 100.13 104.31 113.55 147.52 154.57
ROE 0.01% 4.0% 8.2% 8.6% ~8.5%
Loss Ratio 27.6% 53.5% 62.6% 51.7% —
Combined Ratio n/m 81.25% 92.88% 79.72% —
Retrocession Ratio 0% 11.2% 9.48% 7.14% —
Solvency Ratio 1.40× 2.06× — 3.52× —

FY 2081/82 Q4 (unaudited): Revenue NPR 7.73B (+16.6% YoY); Net profit NPR 1.39B (+8.3% YoY); EPS Rs. 12.79; BVPS Rs. 154.57. Dividend: zero (capital retained for the planned rights issue).

Underwriting

HRL's combined ratio of 79.72% in FY 2080/81 is the standout operating metric — materially better than NRIC. Loss ratio improved from 62.6% to 51.7% over the same period. Retrocession is modest (~7% of net earned premium), meaning the company retains the majority of risk on a 3.52× solvency margin.

Investment Portfolio

Investment portfolio reached approximately NPR 16.47B at FY 2080/81 close (per Q4 FY 2080/81 disclosure). Investment income of NPR 1.16B implies a yield of approximately 7% on the portfolio. A meaningful portion of reported profit comes from float-based investment income, not from underwriting margin alone.

Valuation (May 2026)

Metric Value Reference
Market price ~NPR 705 Down from a 52-week high of ~NPR 1,060
Market cap ~NPR 85B —
P/B (BVPS Rs. 154.57) ~4.6× Munich Re ~1.7×; Swiss Re ~1.1×; Korean Re ~0.9×
P/E (EPS Rs. 12.79) ~55× —
Estimated P/B post-80% rights ~2.5× Diluted BVPS would fall to roughly Rs. 280
Dividend yield 0% No dividend declared for FY 2080/81 payout

Governance — Verified Timeline

Date Event Source
Falgun 25, 2082 (~March 2026) Chairman Shekhar Golchha resigned NEPSEAlpha announcement; Kathmandu Journal
2 April 2026 Deepak Bhatta arrested by Nepal Police CIB on money-laundering charges ShareSansar (2 April 2026); OCCRP
3 April 2026 Bhatta linked to multiple irregularities; reporting alleges funds funnelled through Infinity Holdings into HRL Kathmandu Post (3 April 2026)
9 April 2026 Investigation totals reported at approximately Rs. 3.73B Kathmandu Post — Inside the Rs 3.73 billion fraud investigation
15 April 2026 Residences of Agrawal and Bhatta raided in money-laundering probe Kathmandu Post (15 April 2026)
21 April 2026 Four additional HRL directors (Amit Mor, Rajiv Mor, Shubhechha Kharel, independent director Subhash Kumar Jhunjhunwala) resigned Kathmandu Journal
23 April 2026 Securities Board named businesspersons in alleged share-rigging investigation Kathmandu Post (23 April 2026)
6 May 2026 Court extended Bhatta and Agrawal's remand by 12 additional days Kathmandu Post (6 May 2026)

The allegation per the public reporting: Rs. 2.73B of HRL-related share transactions were allegedly liquidated and proceeds routed through other entities. The Department of Money Laundering Investigation (DMLI) is the lead investigative body.

Section 101 Review

Under the Insurance Act 2079 (Nepal), NIA can declare a company "problematic" under any of:

  • (c) Fraud or money laundering in establishment
  • (e) Repeated harm to shareholders
  • (g) Repeated violations of regulatory directives

If declared problematic, NIA has the authority to take over management. Public reporting in April 2026 indicates NIA is conducting Section 101(c)/(e)/(g) review of HRL.

Key Risks

  1. Section 101 declaration risk — outcome of NIA review is the most material near-term variable.
  2. Audit integrity — with named officers under investigation, every reported figure carries elevated review risk.
  3. 80% rights issue dilution — Rs. ~8.32B planned capital raise; per-share metrics will compress materially if subscribed.
  4. Mandatory cession decay — direct cession rate phasing from 10% to 2% by FY 2083/84 under NIA Reinsurance of Insurers Directive 2080.
  5. Retrocessionaire concentration — majority of risk placed with a small number of international counterparties.
  6. Seismic exposure — Nepal is among the world's most earthquake-prone countries.
  7. No dividend — capital retained for forced rights raise.

Variables to Monitor

  1. NIA decision on Section 101 review (declaration of "problematic insurer" or clearance).
  2. Appointment of replacement chairman, board members, and any CEO change.
  3. New independent audit and any restatements to FY 2080/81 financials.
  4. Rights issue execution: subscription level, pricing, post-issue BVPS.
  5. Combined ratio direction in FY 2081/82 audited print.
  6. NIA framework decision for mandatory cession beyond FY 2084/85.

Sources

Annual reports and financial statements

  • HRL Annual Reports FY 2077/78, 2078/79, 2079/80, 2080/81 (on-disk PDFs).
  • HRL Q4 FY 2081/82 unaudited financial statements via NEPSE / NEPSE Trading reporting.

Ratings

  • ICRA Nepal — HRL Rating Report (July 2023).
  • AM Best — HRL B+ (Stable) reaffirmation (January 2024).

News (governance)

References

Research date: May 10, 2026.

Disclaimer: This analysis is provided for informational purposes only and does not constitute investment advice. All investments involve risk, including potential loss of principal. Past performance is not indicative of future results. Readers should conduct their own due diligence and consult with qualified financial advisors before making any investment decisions.