May 2026 · Personal Finance · NEPSE
Okay so hear me out.
A few weeks ago, I was sitting there watching NEPSE drift down to around 2,740 RSI somewhere in the 17 to 20 range, which, if you know anything about technical analysis, means the market is deeply oversold. And I kept asking myself the same thing I always ask when markets fall this hard: where is the smart money actually going while everyone else is panicking?
This time, instead of scrolling through forums or asking around, I decided to do something a bit different. I went and looked at what Nepal’s mutual funds are holding.
Here’s why that made sense to me. These fund managers collectively control over Rs 45 Arba across 46 schemes. They’re doing this full-time. They’re reading quarterly reports, running screens, meeting management. When the same stocks keep showing up in multiple funds month after month, that’s not random; that’s conviction. And conviction is exactly what I want to follow when I’m trying to find quality in a falling market.
So I pulled the Jestha 2082 data, mapped out the top picks from every sector, dug into the fundamentals and dividend history, and came out with a final list of 10 stocks I’m genuinely interested in. Let me take you through exactly how I got there.
First: What Are the Funds Actually Buying?
The total MF pool as of Jestha 2082 is Rs 45.96 Arba. Commercial banks take the biggest share at 19.68%, followed by non-life insurance at 13.88% and microfinance at 13.57%.
Within each sector, I pulled the top three picks by allocation. Here’s the quick rundown:
Commercial Banks — EBL (Rs 1.16 Arba), SANIMA (Rs 1.14 Arba), NMB (Rs 74.80 Cr)
Development Banks — GBBL (Rs 1.04 Arba), SHINE (Rs 67.40 Cr), KSBBL (Rs 66.52 Cr)
Life Insurance — NLICL (Rs 1.36 Arba), NLIC (Rs 1.06 Arba), HLI (Rs 65.53 Cr)
Non-Life Insurance — NIL (Rs 1.31 Arba), SPIL (Rs 1.30 Arba), SALICO (Rs 1.14 Arba)
Microfinance — CBBL (Rs 1.23 Arba), SKBBL (Rs 99.15 Cr), NUBL (Rs 90.36 Cr)
Hydropower — MEN (Rs 79.63 Cr), API (Rs 64.52 Cr), SAHAS (Rs 43.33 Cr)
Manufacturing — SHIVM (Rs 1.00 Arba), SARBTM (Rs 36.08 Cr), HDL (Rs 34.25 Cr)
Hotels & Tourism — CGH leads with Rs 32.01 Cr
Investment/Reinsurance — HRL (Rs 1.07 Arba), CIT (Rs 78.68 Cr), NRIC (Rs 55.13 Cr)
That gives me a raw universe of about 25 stocks to work with. Now I need to narrow it down.
Cutting It to 10
From those 25, I went through each one properly, quarterly reports, EPS trends, NPL ratios for the banks, premium growth for the insurers, and dividend history. I removed stocks where MF conviction was thin across months, where the fundamentals didn’t back up the allocation, or where I’d basically be doubling up on the same story without adding anything new to the mix.
I also added NABIL here, even though its raw allocation doesn’t always show up at the top (large cap problem the allocation looks smaller relative to market cap). But it kept coming up in everything I was reading, so it earned a spot.
Here’s my final 10, and why I actually care about each one.
EBL — Everest Bank
EBL is the one that jumped out at me first. Highest EPS in the commercial banking sector at Rs 30.86. Lowest NPL ratio at just 0.68%, honestly, that number is remarkable for NEPSE’s banking sector. Growth score of 87.99, which rates A+. Rs 1.16 Arba in MF allocation. For FY2081/82 they declared a 20% total dividend 6% bonus and 14% cash the highest total payout among commercial banks this year.
I keep coming back to EBL because it feels like a bank that’s growing without taking shortcuts on credit quality. That combination is genuinely rare here.
NABIL — Nabil Bank
If EBL is the growth pick, NABIL is the sleep-well-at-night pick. Quality score of 75.95 (A grade), NPL at 0.88%, EPS of Rs 29.69. After the merger with Nepal Bangladesh Bank, it’s now one of the biggest private commercial banks in the country.
The one thing about NABIL that stuck with me I came across a quote from a Kathmandu investor who said it was “the stock I would still hold if there were another earthquake.” That sounds dramatic, but it says something real about the kind of institution NABIL is. They declared a 12.5% pure cash dividend for FY2081/82, which, for income investors, is actually the cleanest payout on this whole list, no dilution, just cash back to shareholders.
NLICL — National Life Insurance
The largest single life insurance bet in the MF universe at Rs 1.36 Arba, and once I looked into it I understood why. GF Score of 87/100. Trading about 3.7% below its estimated fair value when I checked. TTM EPS of Rs 15.64.
Here’s the bigger picture, though: life insurance penetration in Nepal has nearly doubled in the past five years, hitting 48.33% of the population as of mid-2025. Life insurance premiums across the sector grew to Rs 182 Arba in FY 2024/25. That’s a structural shift that’s still playing out, and NLICL is one of the main beneficiaries. For FY2081/82 they declared a 12.5% dividend, 4% bonus and 8.5% cash.
NIL — Neco Insurance
Non-life insurance accounts for 13.88% of all MF investments in Nepal, which tells you how seriously fund managers are taking this sector. NIL leads the non-life pack at Rs 1.31 Arba, and it’s been consistent every month of data I looked at it’s sitting at the top.
What I like about non-life, specifically right now, is that premium rate revisions are feeding through into profitability, which means the next couple of quarters should look better than the last couple. The FY2081/82 exact dividend figure for NIL is still pending final public confirmation (the AGM was held Falgun 11, 2082 I’m watching for the official release).
SPIL — Siddhartha Premier Insurance
Almost identical to NIL in MF allocation at Rs 1.30 Arba, and Siddhartha group backing gives it a solid institutional foundation. But honestly, the thing that caught my eye here was the dividend: SPIL declared a 25% pure cash dividend for FY2081/82. No bonus shares, just cash. At an estimated LTP around Rs 750, that works out to roughly 3.33% cash yield, which is genuinely competitive with fixed deposits right now.
That number tells me the underlying earnings are real. Companies don’t pay 25% cash dividends out of accounting tricks.
GBBL — Garima Bikas Bank
I went back and checked six months of MF data, Mangsir through Jestha and GBBL was the #1 development bank pick every single month. Rs 1.04 Arba. That kind of consistency in fund selection isn’t accidental.
The reason I find GBBL interesting is the valuation angle. Development banks trade at 12–16x P/E vs commercial banks at 18–25x, which means you’re getting similar quality governance and credit discipline at a meaningful discount. FY2081/82 dividend was 10.53% total — 6% bonus and 4.53% cash. RSI around 33 puts it in near-oversold territory.
CBBL — Chhimek Laghubitta
The microfinance sector makes up 13.57% of all MF investment, and CBBL leads it by a significant margin — Rs 1.23 Arba against the second pick’s Rs 99 Cr. When one institution is dominant in a sector allocation, I pay attention.
CBBL operates in rural credit, which has held up better than urban credit through this downturn. The FY2081/82 dividend is 25% total, split evenly 12.5% bonus and 12.5% cash. RSI around 30, estimated P/E of 12–18x. For a business generating those kinds of dividends at that valuation, it’s hard to argue it’s overpriced.
SHIVM — Shivam Cements
Okay this one surprised me a bit. Manufacturing saw the highest YoY growth in MF allocation of any sector +33.13%. And within manufacturing, SHIVM is the clear leader at Rs 1 Arba.
The story here is pretty straightforward: Nepal’s infrastructure spending isn’t going away. Roads, bridges, housing, government projects — all of it needs cement. SHIVM is one of two dominant players in that duopoly. The effective cash dividend for FY2081/82 came out to 15.79% per distribution records, which is solid for a manufacturing company. RSI around 38.
MEN — Mountain Energy Nepal
Without exception, every month of MF data I reviewed had MEN as the #1 hydropower pick. That consistency speaks for itself.
The timing angle here is interesting; we’re heading into monsoon season, which means hydro generation output peaks in H2 of the Nepali fiscal year. The RSI is around 28, making MEN the most oversold stock on my list right now. The FY2081/82 dividend was 21.05% total, but 20% of that was bonus shares. The company is clearly in capital-building mode, not handing out cash. That’s fine for a long-horizon hold, but worth knowing if you’re income-focused.
HRL — Himalayan Reinsurance
HRL is in a category of one. It’s the only listed reinsurer in Nepal, and that matters because all primary insurance companies are required by regulation to cede portions of their risk domestically before going to international markets. That’s a captive customer base with a regulatory guarantee behind it.
Rs 1.07 Arba in MF allocation. Still a relatively young company the FY2081/82 dividend is pending AGM confirmation, though based on the FY2080/81 figure of 4.74% (4.5% bonus + 0.24% cash) and the growth trajectory, I’m estimating somewhere around 5–6% this year. The main reason HRL earns its spot is the moat. There’s nothing else like it on NEPSE.
The Dividend Breakdown
I spent some time going through the FY2081/82 dividends for all 10 stocks properly, because I think dividends tell you a lot about how confident management is in their earnings quality. Here’s what it looks like:
| Stock | Bonus | Cash | Total | Cash yield (est.) |
|---|---|---|---|---|
| EBL | 6% | 14% | 20% | ~2.00% |
| NABIL | — | 12.5% | 12.5% | ~2.36% |
| NLICL | 4% | 8.5% | 12.5% | ~1.42% |
| NIL | ~10% | ~0.53% | ~10.53% | ~0.06% |
| SPIL | — | 25% | 25% | ~3.33% |
| GBBL | 6% | 4.53% | 10.53% | ~1.21% |
| CBBL | 12.5% | 12.5% | 25% | ~1.25% |
| SHIVM | — | 15.79% | 15.79% | ~2.29% |
| MEN | 20% | 1.05% | 21.05% | ~0.32% |
| HRL | ~4.5% | ~0.24% | ~5–6% | ~0.06% |
A few things I keep coming back to when I look at this table:
SPIL at 25% pure cash is the one that stands out most for income investors. No bonus dilution, just Rs 25 cash per Rs 100 of face value, returned directly to shareholders. At current prices, that’s around 3.33% yield.
EBL’s 20% combined is the best total payout in commercial banking for FY2081/82. The 14% cash component alone is significant.
MEN looks great at 21%, but almost all of it is bonus shares, so it’s capital appreciation over income. If you’re comfortable with that, great. If you need cash flow, it’s not the pick.
NABIL’s 12.5% all-cash is the most straightforward of the lot. No complexity, no dilution math to work out. Just cash.
Why I’m Looking at All This Now
I’ll be straight with you, NEPSE at 2,740 with an RSI of 17 to 20 doesn’t feel like a comfortable time to be buying. Oversold can stay oversold for a while. I’m not predicting a sharp recovery next week.
But here’s what I do know. The macro isn’t broken. NRB’s repo rate is at 4.25%. The CD ratio at 74.32% gives banks room to grow credit. Inflation is at a manageable 3.25%. Foreign exchange reserves cover 18 months of imports. These aren’t the conditions of a systemic failure — this feels more like a sentiment correction that’s looking for a catalyst to reverse.
And the stocks I’ve listed here aren’t speculative plays. EBL, NABIL, GBBL, CBBL, these are institutions with decades of operations, conservative management, and the backing of Rs 45 Arba of institutional money. If the market recovers, they recover. If it stays flat for another few months, the dividends keep coming. That’s the kind of setup I find interesting right now.
What I’m Watching Next
A few things I’ll be tracking over the coming months:
- NIL’s official FY2081/82 dividend release — AGM was held, the exact declared figure is still to be confirmed publicly
- HRL’s FY2081/82 AGM (expected mid-2026) — watching to see if the dividend growth trend continues
- Q3 FY2082/83 quarterly reports for NLICL, SPIL, and CBBL, the numbers should confirm or challenge the thesis
- NEPSE RSI recovery above 30 — that’s the technical signal I’m watching for a sentiment shift
I’ll do a follow-up post once the quarterly reports land. If you’re researching any of these yourself, the sources I leaned on most were Sharesansar for sector and MF data, NepseAlpha for live fundamentals, and the official NEPSE announcements page for dividend confirmations.
Would love to hear if you’re looking at any of these stocks differently, drop a comment below or reach out directly. Always more interesting when there’s a proper conversation around this stuff.
This is purely my own research and personal opinion, not investment advice. Do your own digging before putting money into anything. Past dividend distributions and MF allocations don’t guarantee future performance.