October 5, 2021 | Investopaper
Lower Irkhuwa Hydropower Limited is going to issue an Initial Public Offering (IPO). The company is planning to sell 21 lakh shares in the IPO at a face value of Rs 100. Hence, the public issue amounts to Rs 21 crores.
For this purpose, the company has appointed Muktinath Capital Limited as the issue and sales manager. An agreement has been reached between the hydropower company and Muktinath Capital in this regard.
The agreement was signed by Bishweshwar Subedi, managing director of the company, and Kavindra Dhoj Joshi, chief executive officer of Muktinath Capital Limited.
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In the first phase of the IPO, the company will sell 700,000 shares to the locals of the project-affected areas. Similarly, after issuing the shares to the locals, the company has plans to sell 14,00,000 shares to the general public in the second phase of the IPO. Now, the company needs approval from the Securities Board of Nepal (SEBON) for the public offering.
At current, the company has a paid-up capital of Rs 49 crores. After the issue of the IPO, the capital will reach Rs 70 crores.
Lower Irkhuwa Hydropower Limited is developing a 14.15 MW Lower Irkhuwa Hydropower Project in Bhojpur. Nepal SBI Bank and Jyoti Bikas Bank, in the leadership of Machhapuchchhre Bank, will provide a loan financing of Rs 1.68 Arba in the project.
The project will generate 7.50 crore units of electricity annually. The estimated annual revenue from the sale of electricity is Rs 43 crores.
The company has signed the Power Purchase Agreement (PPA) with Nepal Electricity Authority. As per the agreement, NEA will purchase 12.68-gigawatt-hours of electricity during the dry season at Rs 8.40 per unit and 67.11-gigawatt hours during the rainy season at Rs 4.80 per unit.
National Hydropower Company Limited is the main promoter of the company.