Things To Know For The Prospective Investors of Molung Hydropower Company: IPO Opens From Today For Project-Affected Locals and Nepalese Employed Abroad
Tue, Jan 3, 2023 9:17 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Molung Hydropower Company Limited was incorporated on November 28, 2019, as a public limited company, has a paid-up capital of NPR 449.4 million, 100% promoter held, as of mid-Apr 2022. The company is operating a 7MW Molung Khola HPP in Okhaldhunga district, Province 1 of Nepal since March 2018. The project is a run of the river (R-o-R) type and has been developed at a 40% probability of exceedance (Q40) with a design discharge of 8.15m3/s and a gross head of 108.45m. With a contract PLF of 58%, the annual contract energy production is ~36GWh with a dry energy mix of 16%. The project was commissioned on March 26, 2018, a month prior to its Required COD of April 2018, and is eligible for all five tariff escalations.
About the issue:
Molung Hydropower Company Limited will be issuing its IPO to the project-affected locals of Okhaldhunga District and Nepalese citizens working abroad from today i.e on 19th Poush and close on 3rd Magh, 2079. Note that for the locals of Okhaldhunga District, if the issue is not subscribed by the early closing date, the issue can be extended till 18th Magh. 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. 80.25 Crores of which 10% i.e. 8,02,500 unit shares worth Rs. 8.02 crores have been allocated to project-affected locals of Okhaldhunga District. Meanwhile, 34% of the company's issued capital i.e. 27,28,500 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 272,850 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open from today.
For the project-affected locals, the minimum application quantity is 10 units while the maximum quantity is 1000 units. Meanwhile, for Nepalese citizens working abroad, the minimum application quantity is 10 units while the maximum quantity is 8000 units. Sunrise Capital Limited has been appointed as the issue manager.
Click here for the offer letter
| Molung Hydropower Company Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 8,025,000.00 | 802,500,000.00 |
| Total Issue (Project-affected Locals) | 10% | 802,500.00 | 80,250,000.00 |
| Total Issue (Nepalese citizens working abroad) | 3.40% | 272,850.00 | 27,285,000.00 |
| Issue Manager | Sunrise Capital Limited | ||
| Issue Open Date | 19th Poush | ||
| Issue Closing Date (earliest) | 3rd Magh | ||
| Issue Late Closing Date (for locals only) | 18th Magh | ||
| Minimum Application (Project-affected Locals) | 10 | ||
| Maximum Application (Project-affected Locals) | 1,000 | ||
| Minimum Application (Nepalese citizens working abroad) | 10 | ||
| Maximum Application (Nepalese citizens working abroad) | 8,000 | ||
Capital Structure:
| Authorized Capital | 1,000,000,000.00 |
| Issued Capital | 802,500,000.00 |
| Current Paid-Up Capital | 449,400,000.00 |
| Capital after IPO Issuance | 802,500,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 4,494,000.00 | 449,400,000.00 | 56.00% | Already issued |
| Project-Affected Locals | 802,500.00 | 80,250,000.00 | 10% | To be issued |
| General Public (Including Nepalese citizens working abroad) | 2,728,500.00 | 272,850,000.00 | 34.00% | To be issued |
Project Information:
| Name of Project | Molung Khola Jalbidhyut Yojana |
| Type of Project | Run-of-River |
| Installed Capacity | 7 MW |
| Electricity Generation License received | Ashad 02, 2071 |
| Generation Valid Date | Ashad 01, 2106 |
| RCOD | 12th Chaitra 2074 |
| Total Cost | Rs. 145.9 Crores |
| Cost per Megawatt in Rs. | Rs. 20.8 Crores |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Shreeram Maharjan | Chairman |
| Mr. Amrit Kumar Maharjan | CEO |
| Mr. Nabin Maharjan | Director |
| Mr. Kabin Maharjan | Director |
| Mr. Surya Man Maharjan | Director |
| Mr. Kabi Maharjan | Independent Director |
Financial Statement:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/80 (Q1) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital ('000) | 435,484.00 | 449,400.00 | 449,400.00 | 449,400.00 | 802,500.00 | 802,500.00 | 802,500.00 |
| Reserve & Surplus ('000) | (212,204.00) | (225,441.00) | (176,984.00) | (151,518.00) | (119,000.00) | (45,427.00) | 33,111.00 |
| Debt ('000) | 911,553.00 | 928,062.00 | 927,591.00 | 926,809.00 | 535,438.00 | 493,348.00 | 435,699.00 |
| Revenue ('000) | 141,328.00 | 115,007.00 | 156,095.00 | 75,164.00 | 186,007.00 | 189,848.00 | 189,848.00 |
| Interest Expenses ('000) | (88,962.00) | (89,498.00) | (99,193.00) | (28,027.00) | (54,848.00) | (42,904.00) | (37,778.00) |
| Net Profit ('0000) | (27,535.00) | (13,237.00) | 48,459.00 | 26,802.00 | 57,984.00 | 73,573.00 | 78,537.00 |
| Earnings per share (Rs.) | (6.32) | (2.95) | 10.78 | 5.96 | 7.23 | 9.17 | 9.79 |
| Net worth per share (Rs.) | 51.27 | 49.84 | 60.62 | 66.28 | 85.17 | 94.34 | 104.13 |
| Debt-Equity (times) | 4.08 | 4.14 | 3.41 | 3.11 | 0.78 | 0.65 | 0.52 |
| Return on Equity (%) | (1.23) | (0.59) | 1.78 | 0.90 | 0.85 | 0.97 | 0.94 |
ICRA Nepal:
ICRA Nepal has reaffirmed an issuer rating of [ICRANP-IR] BB (pronounced ICRA NP issuer rating double B) to Molung Hydropower Company Limited. Issuers with this rating are considered to have a moderate risk of default regarding the timely servicing of financial obligations.
Credit Strengths
- Reduced evacuation constraints.
- Good promoter profile.
- Debt coverage indicators are expected to be supported by the proposed IPO and stretched repayment tenure.
- Low tariff and off-take risks because of already-signed long-term PPA at predetermined tariffs and escalations.
Credit Challenges
- Weak and fluctuating operational performance.
- Relatively high project cost and lower contract PLF.
- High hydrology risk due to lack of deemed generation clause in PPA.
