Things To Know For The Prospective Investors of Chirkhwa Hydropower: IPO Opens From Today For Locals and Nepalese Employed Abroad
Sun, Aug 13, 2023 8:27 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Chirkhwa Hydropower Limited, incorporated in January 2009, is developing a 4.7 MW Upper Chirkhwa Khola HPP in Bhojpur district, Province-1 of Nepal. The project is a run-of-the-river (R-o-R) type and is being developed at a 40% probability of exceedance. The project has been planned to be developed at a budgeted project cost of NPR 910 million (NPR ~194 million per MW) to be funded in a D: E ratio of 60:40, with the debt component of NPR 545 million secured with Rastriya Banijya Bank Limited. The project has achieved ~90-95% progress till mid-Jan 2023.
About the issue:
Chirkhwa Hydropower Limited will be issuing its IPO to the project-affected locals of Bhojpur District and Nepalese citizens working abroad from today i.e. on 28th Shrawan to the 10th Bhadra, 2080. Note that for the locals of Bhojpur District, if the issue is not subscribed by the early closing date, the issue can be extended till Bhadra 25. However, the issue will not be extended from the early closing date for Nepalese citizens working abroad.
The issued capital of the company is Rs. 40 Crores of which 10% i.e. 400,000 unit shares worth Rs. 4 Crores have been allocated to project-affected locals of Bhojpur District. Meanwhile, 20% of the company's issued capital i.e. 800,000 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 80,000 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open on the date mentioned above.
For the project-affected locals, the minimum application quantity to be applied is 10 units while the maximum quantity is 1,00,000 units whereas for the Nepalese citizens working abroad, the minimum application quantity to be applied is 10 units and the maximum quantity is 5000 units.
RBB Merchant Banking has been appointed as the issue manager.
| Chirkhwa Hydropower Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 4,000,000.00 | 400,000,000.00 |
| Total Issue (Project-affected Locals) | 10% | 400,000.00 | 40,000,000.00 |
| Total Issue (Nepalese citizens working abroad) | 2.00% | 80,000 | 8,000,000.00 |
| Issue Manager | RBB Merchant Capital | ||
| Issue Open Date | 28th Shrawan | ||
| Issue Closing Date (earliest) | 10th Bhadra | ||
| Issue Late Closing Date (for locals only) | 25th Bhadra | ||
| Minimum Application (For Project-affected locals) | 10 | ||
| Maximum Application (For Project-affected locals) | 100,000 | ||
| Minimum Application (For Nepalese Employed Abroad) | 10 | ||
| Maximum Application (For Nepalese Employed Abroad) | 5,000 | ||
Capital Structure:
| Authorized Capital | 400,000,000.00 |
| Issued Capital | 400,000,000.00 |
| Current Paid-Up Capital | 280,000,000.00 |
| Capital after IPO Issuance | 400,000,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 2,800,000.00 | 280,000,000.00 | 70% | Already issued |
| Project-Affected Locals | 400,000.00 | 40,000,000.00 | 10% | To be issued |
| General Public (Including Nepalese citizens working abroad) | 8,000,000.00 | 800,000,000.00 | 20% | To be issued |
Project Information:
| Name of Project | Mathillo Chirkhwa Khola Jalbidhyut Yojana |
| Type of Project | Run-of-River |
| Installed Capacity | 4.7 MW |
| Electricity Generation License received | Chaitra 11, 2073 |
| Generation Valid Date | Chaitra 10, 2108 |
| RCOD | Poush 25, 2078 |
| Total Cost | Rs. 99.8 Crores |
| Cost per Megawatt in Rs. | Rs. 21.23 Crores |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Gelje Lama | Chairman |
| Mr. Dipak Rai | Managing Director |
| Mr. Bir Bahadur Rai | Director |
| Mr. Kedarnath Karki | Director |
| Mr. Pahad Shrestha | Director |
| Mrs. Dawa Jangmu Lama Shrestha | Director |
| Mr. Dambar Bahadur Karki | Director |
| Mr. Ganeshman Singh Karki | Director |
Investors:
Financial Statement:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/080 (Q3) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital (000') | 1,900,284.00 | 1,900,284.00 | 2,800,000.00 | 2,800,000.00 | 4,000,000.00 | 4,000,000.00 | 4,000,000.00 |
| Share Premium (000') | - | - | - | - | 22,882,592.00 | 22,882,592.00 | 22,882,592.00 |
| Reserve & Surplus (000') | - | - | - | - | - | - | - |
| Debt (000') | - | - | - | - | - | - | - |
| Revenue (000') | - | - | - | - | 16,296.00 | 152,128.15 | 156,692.00 |
| Interest Expenses (000') | - | - | - | - | - | 63,400.80 | 6,055.44 |
| Net Profit (000') | - | - | - | - | 8,281.50 | 4,569.40 | 32,455.57 |
| Earnings per share (Rs.) | (0.06) | - | - | - | 2.07 | 11.42 | 13.11 |
| Net worth per share (Rs.) | 99.94 | 100.01 | 100.01 | - | 102.07 | 103.80 | 108.11 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | - | - | - | - | 0.02 | 0.01 | 0.08 |
ICRA Ratings Nepal:
ICRA Nepal has reaffirmed the issuer rating of [ICRANP-IR] BB- (pronounced ICRA NP issuer rating double B minus) to Chirkhwa Hydropower Limited. Issuers with this rating are considered to have a moderate risk of default regarding the timely servicing of financial obligations.
Key Rating Strength
- Decline in project execution risk.
- Lower evacuation risk.
- Lower funding risk.
- Low tariff and offtake risks with the presence of long-term PPA at predetermined tariffs and escalations.
Key Rating Weaknesses
- Limited cushion in required COD, the delay could expose the project to tariff escalation loss and late COD penalty.
- The small scale of operations and concentration risk.
- Hydrological risk and absence of deemed generation clause in the PPA.
