Things To Know For The Prospective Investors of Makar Jitumaya Suri Hydropower; IPO Opens From Today For Project-Affected Locals and Nepalese Employed Abroad
Sun, Jan 29, 2023 9:58 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Makar Jitumaya Suri Hydropower Limited was incorporated on July 15, 2021, after the merger of Makar Jitumaya Hydropower Private Limited with Suri Khola Hydropower Limited. The merged entity is currently developing two under-construction hydropower projects namely, the 6.4 MW run-of-river, Suri Khola Hydropower Project, and the 7MW Upper Suri Hydropower Project in the Dolakha district of Nepal.
About the issue:
Makar Jitumaya Suri Hydropower Company Limited will be issuing its IPO to the project-affected locals of the Dolakha District and Nepalese citizens working abroad from today i.e. on 15th Magh and close on 29th Magh, 2079. Note that for the locals of Dolakha District, if the issue is not subscribed by the early closing date, the issue can be extended till the 15th Falgun. 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. 76 Crores of which 10% i.e. 7,60,000 unit shares worth Rs. 7.6 crores have been allocated to project-affected locals of Dolakha District. Meanwhile, 20% of the company's issued capital i.e. 15,20,000 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 152,000 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open on the date mentioned above. The promoter-public share ratio will be 70: 30 after this IPO.
Prabhu Capital Limited has been appointed as the issue manager. For the project-affected locals, the minimum application quantity is 10 units while the maximum quantity is 10,000 units. Meanwhile, for Nepalese citizens working abroad, the minimum application quantity is 10 units while the maximum quantity is 50,000 units.
Click here for the offer letter
| Makar Jitumaya Suri Hydropower Company Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 7,600,000.00 | 760,000,000.00 |
| Total Issue (Project-affected Locals) | 10% | 760,000.00 | 76,000,000.00 |
| Total Issue (Nepalese citizens working abroad) | 2.00% | 152,000.00 | 15,200,000.00 |
| Issue Manager | Prabhu Capital Limited | ||
| Issue Open Date | 15th Magh | ||
| Issue Closing Date (earliest) | 29th Magh | ||
| Issue Late Closing Date (for locals only) | 15th Falgun | ||
| Minimum Application (Project-affected Locals) | 10 | ||
| Maximum Application (Project-affected Locals) | 10,000 | ||
| Minimum Application (Nepalese citizens working abroad) | 10 | ||
| Maximum Application (Nepalese citizens working abroad) | 50,000 | ||
Capital Structure:
| Authorized Capital | 760,000,000.00 |
| Issued Capital | 760,000,000.00 |
| Current Paid-Up Capital | 532,000,000.00 |
| Capital after IPO Issuance | 760,000,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 5,320,000.00 | 532,000,000.00 | 70% | Already issued |
| Project-Affected Locals | 760,000.00 | 76,000,000.00 | 10% | To be issued |
| General Public (Including Nepalese citizens working abroad) | 1,520,000.00 | 152,000,000.00 | 20% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Himal Gurung | Executive Chairman |
| Mr. Shabda Gyawali | Director |
| Ms. Saraswati Rai | Director |
| Mr. Chandra Bahadur Karki | Director |
| Mr. Mitra Bahadur Shrestha | Independent Director |
Project Information:
| Name of Project | Suri Khola Jalbidhyut Yojana | Upper Suri Khola Jalbidhyut Yojana |
| Type of Project | Run-of-River | Run-of-River |
| Installed Capacity | 6.4 MW | 7 MW |
| Electricity Generation License received | Jestha 24, 2072 | Shrawan 15, 2076 |
| Generation Valid Date | Jestha 23, 2107 | Shrawan 14, 2111 |
| RCOD | Baisakh 18, 2079 | Chaitra 30, 2079 |
| Total Cost | Rs. 1.34 Arba | Rs. 1.29 Arba |
| Cost per Megawatt in Rs. | Rs. 19.23 Crores | Rs. 18.50 Crores |
Financial Statement:
| Financial Highlights | ||||||
|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | ||||
| 2077/78 | 2078/79 | 2079/080 (Q1) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital ('000) | 340,747.00 | 532,000.00 | 532,000.00 | 760,000.00 | 760,000.00 | 760,000.00 |
| Reserve & Surplus ('000) | (62,598.00) | (38,800.00) | (16,698.00) | (35,964.00) | 78,416.00 | 211,288.00 |
| Debt ('000) | - | - | - | - | - | - |
| Revenue ('000) | 507,180.00 | 24,121.00 | 68,802.00 | 178,220.00 | 426,631.00 | 439,175.00 |
| Interest Expenses ('000) | - | - | - | (109,074.00) | (184,285.00) | (176,681.00) |
| Net Profit ('0000) | (14,081.00) | (20,218.00) | 22,102.00 | 2,936.00 | 114,281.00 | 132,872.00 |
| Earnings per share (Rs.) | (4.13) | (3.80) | 4.15 | 0.39 | 15.04 | 17.48 |
| Net worth per share (Rs.) | 81.63 | 92.71 | 96.86 | 95.28 | 110.32 | 127.80 |
| Debt-Equity (times) | - | - | - | - | - | - |
| Return on Equity (%) | (0.51) | (0.41) | 0.43 | 0.04 | 1.36 | 1.37 |
CARE Ratings:
CARE Ratings Nepal Limited (CRNL) has reaffirmed the issuer rating of ‘CARE-NP BB (Is)’ assigned to Makar Jitumaya Suri Hydropower Limited. Issuers with this rating are considered to have a moderate risk of default regarding the timely servicing of financial obligations, in Nepal
Key Rating Weaknesses
- Significant time overrun of Suri Khola Hydropower Project (SKHP) along with cost overrun.
- Project stabilization risk in the case of the Suri Khola Hydropower Project.
- Project implementation risk in the case of the Upper Suri Khola Hydropower Project.
- Hydrology risk associated with run-of-the-river power generation.
- Exposure to regulatory risk.
- Exposure to volatile interest rate risk.
Key Rating Strengths
- Strong parentage and experienced management team.
- The power purchase agreement with sufficient period coverage.
- Power evacuation risk.
- Favorable Government policies towards power sector.
