Nepal Electricity Authority's IPO Proposal Make Strides as Ministry of Finance Presents Agenda to Cabinet

The proposal submitted by the Nepal Electricity Authority (NEA) for the issuance of shares to the general public at a premium price has been approved by the Ministry of Finance. Following the financial approval, the Ministry of Energy, Water Resources, and Irrigation will submit the necessary proposal to the Cabinet for approval.

Executive Director Kulman Ghising, who spearheaded the proposal, expressed enthusiasm about the approved plan, which allocates up to 10% of the authorized capital for public shares. The authorized capital of the Electricity Authority, standing at Rs.3 Kharba, is set to pave the way for increased public participation.

As outlined in the proposal, the book value of each share is pegged at approximately Rs. 125, with an additional premium applied. This implies that prospective investors will need to invest Rs.250 for each share they wish to acquire.

The fiscal year 2078/79 records Rs.1.75 Kharba in share capital and a reserve fund of Rs.27 Arba, resulting in a net worth of Rs.2.02 Kharba earmarked for this share issuance.

ICRA Nepal has reaffirmed a credit rating of AA+ for the IPO issuance of Nepal Electricity Authority (NEA) . Issuers with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations, such issuers carry very low credit risk.