Things To Know For The Prospective Investors of Menchhiyam Hydropower; IPO Opens From Today For Project-Affected Locals and Nepalese Employed Abroad
Wed, Feb 22, 2023 9:52 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Menchhiyam Hydropower Limited is a public limited company, incorporated on November 08, 2017, as a Private Limited company, which was then converted into a public company on July 15, 2021. The company is involved in setting up of a 4.72 MW run-of-river, Upper Piluwa Khola-II Small Hydropower Project (UPKHP) in the Sankhuwasabha district of Nepal by utilizing the available head and flow from Piluwa Khola (river). The project is constructed under BOOT (Build, own, Operate, and Transfer) mechanism.
About the issue:
Menchhiyam Hydropower Limited will be issuing its IPO to the project-affected locals of Sankhuwasabha District and Nepalese citizens working abroad from today i.e. on 10th Falgun and will conclude on 25th Falgun, 2079. Note that for the locals of Sankhuwasabha District, if the issue is not subscribed by the early closing date, the issue can be extended till 9th Chaitra. 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. 54.25 Crores of which 10% i.e. 5,42,583 unit shares worth Rs. 5.42 crores have been allocated to project-affected locals of Sankhuwasabha District. Meanwhile, 20% of the company's issued capital i.e. 10,85,167 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 108,517 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open today.
The minimum application quantity to be applied for both project-affected locals and Nepalese citizens working abroad is 10 units while the maximum quantity is 10,000 units. NIC Asia Capital Limited has been appointed as the issue manager. The promoter-public share ratio will be 70: 30 after this IPO.
Click here for the offer letter
| Menchhiyam Hydropower Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 5,425,833.00 | 542,583,300.00 |
| Total Issue (Project-affected Locals) | 10% | 542,583.30 | 54,258,330.00 |
| Total Issue (Nepalese citizens working abroad) | 2.00% | 108,517 | 10,851,666.00 |
| Issue Manager | NIC Asia Capital | ||
| Issue Open Date | 10th Falgun | ||
| Issue Closing Date (earliest) | 25th Falgun | ||
| Issue Late Closing Date (for locals only) | 9th Chaitra | ||
| Minimum Application | 10 | ||
| Maximum Application | 10,000 | ||
Capital Structure:
| Authorized Capital | 550,000,000.00 |
| Issued Capital | 542,583,300.00 |
| Current Paid-Up Capital | 379,808,300.00 |
| Capital after IPO Issuance | 544,053,400.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 3,798,083.00 | 379,808,300.00 | 70% | Already issued |
| Project-Affected Locals | 379,808.30 | 37,980,830.00 | 10% | To be issued |
| General Public (Including Nepalese citizens working abroad) | 1,085,167 | 108,516,700.00 | 20% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Deepak Khadka | Chairman |
| Ms. Binita Thapa | Director |
| Mr. Hari Shankar Puri | Director |
| Mr. Bikal Thapa Chhetri | Director |
| Mr. Sevak Pokharel | Director |
| Mrs. Devi Thapa Chhetri | Director |
Financial Statement:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/080 (Q1) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital ('000) | 160,000.00 | 379,808.00 | 379,808.00 | 379,808.00 | 5,425,833.00 | 5,968,416.30 | 5,968,416.30 |
| Reserve & Surplus ('000) | (64,198.00) | (75,390.00) | (85,656.00) | - | (1,072,090.00) | (444,630.00) | 1,946,921.00 |
| Debt ('000) | - | - | - | - | - | - | - |
| Revenue ('000) | - | - | - | - | 589,113.41 | 1,490,330.76 | 1,534,159.58 |
| Interest Expenses ('000) | - | 134.00 | 88.00 | 18.00 | 260,362.25 | 286,931.01 | 316,257.94 |
| Net Profit ('0000) | (8,934.00) | (11,192.00) | (10,266.00) | (5,825.00) | (21,553.00) | 62,746.00 | 63,932.00 |
| Earnings per share (Rs.) | (3.04) | (2.95) | (2.70) | (1.53) | (3.97) | 10.51 | 10.71 |
| Net worth per share (Rs.) | 78.15 | 80.15 | 77.45 | - | 80.24 | 92.55 | 103.26 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | (0.93) | (0.37) | (0.35) | (0.15) | (0.05) | 0.11 | 0.08 |
CARE Ratings:
CARE Ratings Nepal Limited (CRNL) has reaffirmed the issuer rating of ‘CARE-NP BB (Is)’ assigned to Menchhiyam Hydropower Limited. Issuers with this rating are considered to offer a moderate risk of default regarding the timely servicing of financial obligations, in Nepal
Credit strengths
- Experienced board members and management team.
- A Power Purchase agreement with a sufficient period of coverage.
- Lower Power evacuation risk.
- Favorable Government policies towards the power sector.
Credit challenges
- Operations stabilization risk as debt service burden remains high in the initial years of operations owing to the high cost of a project.
- Hydrology risk associated with run-of-the-river power generation.
- Exposure to regulatory risk.
- Exposure to volatile interest rates.
