April 20, 2023 | Investopaper
After issuing shares to the locals and foreign employed Nepalese in the first phase, Menchhiyam Hydropower Limited is currently issuing shares to the general public in the second phase of the Initial Public Offering (IPO). The IPO to general public is open from Baisakh 4, 2080 BS.
The company is floating 10,13,453 shares in the second phase of the IPO. This includes 36,803 shares that remained under-subscribed by the locals. Out of the total shares, 56,099 shares are allotted to the mutual fund schemes while 22,439 shares are reserved for the employees of the company. Hence, the general public can participate in the remaining 9,34,915 shares.
Due to over-subscription of shares, the public offering will close on Baisakh 7, 2080 BS.
One can apply for a minimum of 10 shares and a maximum of 10,000 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 Nepalese in Foreign Employment from Falgun 10, 2079 BS.
The IPO to locals was closed on Chaitra 9, 2079 BS. Likewise, the IPO to the Nepalese in foreign employment was closed on Falgun 25, 2079 BS.
The company had issued 10 percent of the issued capital i.e. 5,42.583 shares to the locals of Sankhuwasabha District. Out of the total, 5,05,780 shares were subscribed by the locals.
Similarly, the company had sold 1,08,517 shares to the Nepalese in foreign employment (10 percent from general public’s quota).
Securities Board of Nepal (SEBON) had given permission to the company on Magh 19, 2079 BS for the public issuance. The company had submitted the application to the board on Shrawan 28, 2079 BS. Only after the approval from the regulatory body SEBON, the company can float the shares to the public.
In total (including locals and public), the company plans to sell 16,27,750 shares in the public offering. At a par value of Rs 100, the public issue amounts to Rs 16.27 crores.
CARE Ratings Nepal Limited has assigned an Issuer rating of ‘‘CARE-NP BB (Is) [Double B (Issuer Rating)]’ to Menchhiyam Hydropower Limited. Issuers with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations, in Nepal.
The company has appointed NIC Asia Capital Limited as the issue and sales manager for the IPO.
About Menchhiyam Hydropower Limited
Menchhiyam Hydropower Limited was established on November 08, 2017 as a private limited company. Later, on July 15, 2021, the company was converted into a public limited company.
The company is constructing a 4.72 MW run-of-river, Upper Piluwa Khola-II Small Hydropower Project in Sankhuwasabha district of Nepal.
The company has already fixed the PPA with Nepal Electricity Authority (NEA) on August 28, 2015 for sale of 4.72 MW electricity to be produced from the project. The tariff for wet season (Mid-April to Mid-December) is Rs 4.80 per kWh and for dry season (Mid- December to Mid-April) is Rs 8.40 per kWh with 3 percent escalation on base tariff for 5 times.
The per-MW cost of the project is estimated at Rs. 26.28 crores.
The power generated from the project will be evacuated by 9Km long 33KV Transmission Line to NEA at Baneshwor Substation.
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