Shiva Shree Hydropower 35 lakh units IPO rated Grade 4 by ICRA Nepal

ICRA Nepal Limited, Nepal’s only credit rating agency licensed by SEBON, has assigned an “[ICRANP] IPO Grade 4” rating to the proposed Initial Public Offering (IPO) of Shiva Shree Hydropower Limited, indicating below average fundamentals. The hydropower company is proposing to come out with an Initial Public Offer of 35,00,000 units IPO shares of face value Rs 100 each at par. Of the total shares, 1,400,000 shares will be issued to project affected areas while remaining 21,00,000 shares will be issued to general public and staff. Shiva Shree Hydropower is developing a 22.2 MW Upper Chaku ‘A’ Hydroelectric Project at Sindhupalchowk district. Shiva Shree Hydropower Limited (SSHL) was converted into public limited company on 12^th December 2016 to facilitate public participation. SSHL has a promoter base of 67promoters (including7 institutions). The promoter holding after proposed IPO is expected to dilute to 75%, assuming full subscription. The management plans to use the IPO proceeds as a part of equity towards project completion. As per Icra Nepal. The project has a catchment area of ~41 sq. km that is expected to support the design discharge of 3.25 cumecs at 40% exceedance flow. As per the terms of the PPA, the tariff for wet season is NPR 4 per kWhr and for dry season1is NPR 7 per kWhr with 3% escalation on base tariff for 9 years. The contract Plant Load Factor (PLF) of the project is ~61% with annual production capacity of ~118GWh energy. 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 fundamentals.