November 3, 2023 | Investopaper
IPO Allotment Of Chirkhwa Hydropower Limited
RBB Merchant Banking Limited, the issue manager for the initial public offering (IPO) of Chirkhwa Hydropower Limited, has concluded the IPO allotment process on Thursday.
After the allotment, 85,930 applicants have received 10 shares each through lottery
A total of 11,31,936 valid applicants had subscribed for the shares. With the allotment, more than 10.46 lakh applicants were left empty-handed.
To view the IPO result of Chirkhwa Hydropower Limited, click the link below:
Second Phase: IPO To General Public
After issuing shares to the locals and foreign employed Nepalese in the first phase, Chirkhwa Hydropower Limited had sold shares to the general public in the second phase of the Initial Public Offering (IPO). The IPO to general public was open from Ashwin 23, 2080 BS.
The company had issued 8,59,300 shares in the second phase of the IPO. This included 1,95,300 shares that remained under-subscribed by the locals in the first phase.
40,000 shares were allotted to the mutual fund schemes while 16,000 shares were reserved for the employees of the company.
Due to over-subscription of shares, the IPO to general public was closed on Ashwin 26, 2080 BS.
One could apply for a minimum of 10 shares and a maximum of 100,000 shares.
First Phase: IPO To Locals & Foreign-Employed Nepalese
In the first phase of the IPO, the company had sold shares to the locals of the project affected areas and to the Nepalis in Foreign Employment from Shrawan 28, 2080 BS.
The IPO to the foreign-employed Nepalis was closed on Bhadra 10, 2080 BS. The company had sold 80,000 shares to the Nepalis in foreign employment (10 percent from general public’s quota).
Similarly, if fully subscribed, the IPO to locals was set to close on Bhadra 10, 2080, 2080 BS. However, due to under-subscription until that period, the deadline for application was extended until Bhadra 25, 2080 BS.
The company had issued 10 percent of the issued capital i.e. 4,00,000 shares to the locals of Bhojpur district.
The locals could apply for a minimum of 10 shares and a maximum of 1,00,000 shares. Likewise, the foreign-employed Nepalis could subscribe for a minimum of 10 shares and a maximum of 5,000 shares.
In total (including the first and second phase), the company will sell 12,00,000 shares in the IPO. At a par value of Rs. 100, the public issue amounts to Rs. 12 crores.
For this purpose, Securities Board Of Nepal (SEBON) has given permission to the company on Ashad 20, 2080 BS. The company had submitted an application to the board on Karthik 17, 2079 BS seeking permission for public issuance. Only after the approval from SEBON, the company can issue the shares to the public.
The company has appointed RBB Merchant Banking Limited as issue and sales manager. The agreement for public offering has already been signed between the company and RBB Merchant Banking Limited in this regard.
After the IPO (if fully subscribed), the general public along with locals will possess 30 percent ownership in the company while the promoters will hold the remaining 70 percent shares.
About Chirkhwa Hydropower Limited
Chirkhwa Hydropower Limited was established on January 2009. The company is currently developing Chirkhwa Hydroelectric Project in Bhojpur District. The project is a run-of-the-river type project with an installed capacity of 4.7 MW.
The estimated cost of the project is Rs. 99.80 crores which translates into per MW cost of Rs. 21.23 crores.
The company has already signed Power Purchase Agreement (PPA) with Nepal Electricity Authority at Rs. 4.8 per unit in wet season and Rs. 8.4 per unit during the dry season, with 3% annual escalation on the base tariff for first five years.
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