Hydro companies, banks to issue over 56 million shares
- Potential Windfall
Jul 24, 2017-Seven hydropower companies and four financial institutions are in the process of issuing primary shares, the Securities Board of Nepal (Sebon) said.
They will be issuing 56,803,085 primary shares through initial public offerings (IPOs) and further public offerings (FPOs).
According to Sebon, the hydropower companies are slated to make IPOs worth Rs3.32 billion. Rasuwagadhi, a subsidiary of Chilime Hydropower, has planned to make the largest share issue of Rs1.64 billion.
Rasuwagadhi Hydropower Company plans to produce 111 MW of electricity. Chilime and the Nepal Electricity Authority own 33 percent and 18 percent of the company respectively.
It has appointed Siddhartha Capital, NIBL Capital Market, Global IME Capital and NCM Merchant Banking as issue managers.
After the IPO, employees of the Employees Provident Fund (EPF) will own 1 percent of the shares, contributors to the EPF will have 19.50 percent and employees of promoter companies will hold 3.5 percent of the shares in the company.
Rasuwagadhi has set aside 10 percent of the shares for project-affected locals and 15 percent for the general public.
Similarly, CEDB Hydro Fund will be making an IPO worth Rs228.93 million. It has appointed Sunrise Capital as issue manager.
CEDB was founded by the then Clean Energy Development Bank to provide equity investment for hydropower projects.
It has three hydropower projects in operation and four projects at the
construction and development stages.
Likewise, Panchakanya Mai Hydropower has planned to issue 1,100,000 shares for the local people. Unique Hydel, Kalika Power, Laughing Buddha Power Nepal and Radhi Bidyut Company, the developer of the 4.4 MW Radhi Small Hydropower Project, are among others waiting for the regulator’s approval.
Stockbroker Anjan Raj Poudel said that attraction for shares of hydropower companies had been growing of late.
According to him, they have moved to IPO following Sebon’s instruction to issue at least 10 percent of their shares to affected locals.
Five of the seven hydropower companies have aimed to issue primary shares targeting locals.
The commercial and development banks that are planning to issue primary shares are NMB Bank, Bank of Kathmandu, Nepal Grameen Bikas Bank and Samudayik Laghubitta Bittiya Sanstha.
NMB Bank has sought Sebon’s approval to issue 11,415,163 shares in an FPO while the Bank of Kathmandu and Nepal Grameen Bikas Bank have planned to issue 6,158,067 and 975,000 shares respectively. Likewise, Samudayik Laghubitta Bittiya Sanstha has planned to offer general shares worth Rs30 million.
Published: 24-07-2017 08:21