Ridi IPO model: both groups under lottery; allotment on April 1

ShareSansar, March 28:

Probably for the first time in the history of share market of the country, the issue managers have decided to put both groups of investors under the lottery system while allotting the Initial Public Offering (IPO) of Ridi Hydropower Development Company Limited.

The allotment will be held on April 1.

As per the knowledgeable sources, those who applied up to Rs 42,000 under the small group as well as those who have applied from Rs 51, 000 to 1 lakh 8 thousand approx. under the Other group  are likely to fall under the lottery.

Though the issue manager is still compiling the final data, the IPO is likely to be allotted at 2.26 percent for the small group and 0.93 percent of the large one.

The allotment model is being designed in such a way since there were overwhelming applications for the both the retail and the other groups, according to the issue managers Civil Capital and Elite Capital (now Global IME Capital).

Ridi hydropower’s IPO of 11.70 lakh units, is oversubscribed by more than 93 times, according to the preliminary estimate.

Ridi had issued the IPO at the face value of Rs 100 per unit on February 16.

The IPO being managed by Civil Capital Market Limited and co-managed by Elite Capital Limited had close on February 20.

Of the total units of the primary shares, 58,500 units were kept aside for Nabil Balanced Fund-1, SIG1 and Nagarik Ekanaga Yogana, and additional 23,400 units were reserved for the hydropower's staff.

It may also be noted that Ridi had earlier issued the IPO for 3 lakh unit equity shares to the local residents affected or in the vicinity of the 2.4 MW Ridi Khola Small Hydropower Project in October last year.

Ridi Khola Small Hydropower Project came into operation in Kartik 2066, has already sold electricity worth Rs 14.83 crore to the Nepal Electricity Authority.

The developer of the project, Ridi Hydropower Development Company was registered as a private company back in Ashwin 2057 and converted to a public undertaking in Shrawan 2063.

The company has the authorized capital of Rs 50 crore, issued capital of Rs 30 crore and the paid-up capital of Rs 18.3 crore after the issuance of the IPO to the locals. After the issuance of the IPO to the general public, Ridi Hydropower’s paid-up will surge to Rs 30 crore.

ICRA Nepal has given Grade 3 credit rating to the IPO of the company, which had posted a net profit of Rs 2.12 crore in the last fiscal year 2069/70.

Ridi Hydropower Development Company, which is one of the companies in the group of Arun Valley and Rairang Hydropower Development Company have four projects under its belt.

Among them, three are already operational while one is under construction.