Things To Know About Buddhabhumi Nepal Hydropower IPO 2078

About IPO .

Buddhabhumi Nepal Hydropower has opened IPO sale to the public from Monday.The company has opened 800,000 IPOs worth Rs 80 million.

Of this, 5% or 40,000 shares have been allotted to mutual funds and 2% or 16,000 shares have been allotted to employees.

The general public will be able to apply for the remaining 744,000 lots. Applications for this IPO can be submitted till September 30.If all the shares are not sold within that period, the application can be submitted till September 10.Investors will be able to apply for a minimum of 10 lots and a maximum of 50,000 lots.

In this, Civil Capital Market has acted as the sales manager. Investors will be able to replenish shares through C-ASWA banks and financial institutions and My Share. It is constructing 4.993 MW Lower Tadi Khola Hydropower Project in Nuwakot district.

Rating

Rating agency ICRA Nepal has given Buddhabhumi’s IPO an ‘ICRP IR Double B Minus’ rating. ICRA gave the rating on August 24, 2020. This rating expires on August 23.

How many applications to apply for?

Investors have to rely on luck to get an Buddhabhumi Nepal Hydropower IPO . As the company has issued only 744,000 shares to the public, it can be estimated that there will be more applications than the demand. The number of investors applying for IPOs has also increased significantly recently.

Last time, more than 2.4 million investors have started applying for each IPO. When the IPO of Buddhabhumi is distributed at the rate of minimum 10 lots, only 74,400 people will get the shares . On this basis, applying for 10 lots in Buddhabhumi’s IPO seems to be enough.

However, the company has made arrangements to apply for a minimum of 10 lots and a maximum of 50,000 lots.

Project details

Buddhabhumi Nepal Hydropower Company Limited was registered as a private limited company in the Office of the Registrar of Companies on 31 July 2074 under the Companies Act, 2063 BS.Similarly, in the same year, permission was received from the Office of the Registrar of Companies to operate as a public limited company.

Registered Office Kathmandu District, Kathmandu Municipal Corporation Ward no. 3, Panipokhari, Maharajgunj.

The company’s hydropower generation center is located in Dupcheshwor village municipality (formerly Samundratar, Sundaradevi, Balkumari and Thaprek VDCs) of Nuwakot district.The company is constructing 4.993 MW Lower Tandy Khola Hydropower Project in Nuwakot using water from Tandy Khola and Chakke Khola.

The company had obtained permission to generate electricity on March 10, 2010. The company has stated that this license will remain valid till March 10, 2010. The total cost of the project is Rs. 1.19 billion. Its cost per megawatt is Rs. 238 million.

Capital structure and financial projection

The authorized capital of Buddhabhumi Nepal Hydropower is Rs. 750 million. Similarly, the issued capital is Rs. 400 million.  Out of this, Rs. 280 million has been paid from the founding shareholders and Rs. 4 crore from the project affected locals and a total of Rs. 320 million has been paid.

After the sale of 800,000 IPOs to the general public and employees, the paid-up capital of Buddhabhumi will reach Rs. 400 million.

The share of the founding shareholders in the company will be 70%, 10% of the locals and 20% of the general public.The company has no plans to increase its capital by the fiscal year 2080-81.

The capital of Rs. 400 million that will be maintained after the IPO sale will remain the same till that year.It has mentioned in the financial projection that it will make a net profit of Rs. 64.9 million by the end of the current fiscal year.

It is projected to make a net profit of Rs. 739.79 million in the fiscal year 2079-80.Similarly, earnings per share will reach Rs 16.23 and net worth per share will reach Rs 95.32 in the current fiscal year. By the fiscal year 2079-80, the earnings per share will reach 18 rupees 49 paisa. Net worth is projected at Rs 182.13 per share.

Management and basic shareholders

Purnalal Shrestha is the Chairman of the Board of Directors of Buddhabhumi Nepal Hydropower. The company has stated that Shrestha, who has obtained higher secondary level (IA) educational qualification, has no previous experience related to the hydropower sector.

He has 15 years of experience in the real estate business. Shrestha is in the role of operator in Bright Way Investment.

Meanwhile, Shyam Bahadur Shrestha has taken over as the Chief Executive Officer (CEO).He has a bachelor’s degree in engineering and has worked in the Electricity Authority for 35 years, according to the company.

The company has 18 basic shareholders. Out of which, Purnalal Shrestha has held the highest number of 339,525 shares.