Lower Erkhuwa Hydropower to Sell 28.05 Lakh Shares in IPO | Submits Application to SEBON
March 4, 2024 | Investopaper
Lower Erkhuwa Hydropower Company Limited is going to issue an Initial Public Offering (IPO). The company is planning to sell 28,05,750 lakh shares in the IPO at a face value of Rs 100. Hence, the public issue amounts to Rs 28.05 crores.
For this purpose, the company has submitted the application to Securities Board of Nepal (SEBON) on Falgun 11, 2080 BS. Only after the approval from the regulatory body SEBON, the company can sell the shares to the public.
Muktinath Capital Limited is the issue and sales manager for the IPO. 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 13,05,000 shares to the locals of the project-affected areas. Similarly, after issuing the shares to the locals, the company has plans to sell 15,00,750 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 102.44 crores. After the issue of the IPO, the capital will reach Rs 130 crores.
About Lower Erkhuwa Hydropower Company Limited
Lower Erkhuwa Hydropower Company Limited is currently developing a 13.04 MW MW Lower Erkhuwa Hydropower Project in Bhojpur.
The estimated cost of the project is Rs. 2.89 Arba which translates into per-MW cost of Rs. 22.20 crores. Nepal SBI Bank and Jyoti Bikas Bank, in the leadership of Machhapuchchhre Bank, have provided 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.
The major promoters of the company include:
—National Hydro Power Company Limited (35%),
—Shikhar Insurance Limited (6%),
—Kumar Pandey (5%),
—Bishweshwar Subedi (3%),
—Atendra Bahadur Shrestha (3%),
—Sky Touch Investment & Consultant Private Limited (3%), and
—Mala Investment (2%)
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