ICRA Nepal assigns IPO Grade 4+ to upcoming 87.60 lakh units IPO shares of Sanjen Jalavidhyut

ICRA Nepal has assigned “[ICRANP] IPO Grade 4+” to the proposed Initial Public Offering (IPO) of Sanjen Jalavidhyut Company Limited, indicating below-average fundamentals. Sanjen Jalavidhyut is proposing to issue IPO of 87,60,000 units shares to be floated at a par value of Rs 100 per share. Of the total shares, 24% is reserved to contributories and employees of the lender of the institution (Employees Provident Fund - EPF) and to employees of promoter companies. After that the company will later issue IPO to affected locals (10%) and general public (15%). Citizen Investment Trust Limited has been appointed as the issue manager for the IPO. The IPO shares is in Securities Board of Nepal (SEBON) pipeline for approval. Sanjen Jalavidhyut Company is a subsidiary of Chilime Hydropower Company Limited (CHCL) and was incorporated in February 2010 as a public limited company. As per Icra Nepal, the grading factors in the strengths of promoter companies (NEA and Chilime Hydropower Company Limited which are both direct/indirect Government undertakings) which have significant experience in development and operations of hydropower projects. The grading assigned takes into account the significant project implementation risks involved in the under-construction hydroelectric projects (HEPs) of aggregate 57.3 MW being developed by SJCL. The projects would also be entitled to a capital subsidy of NPR 5 million per MW from Government upon connection to national grid. Sanjen Hydropower is developing two run of the river (ROR) hydropower projects in Sanjen river– Sanjen Upper Hydroelectric Project (SUHEP) of capacity 14.8 MW and cascade project Sanjen Hydroelectric Project (SHEP) having capacity of 42.5 MW in Rasuwa district of Central Development Region of Nepal. ICRA Nepal assigns IPO grading on a scale of IPO Grade 1 through IPO Grade 5, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor