Things To Know For The Prospective Investors of Upper Lohare Hydropower Company: IPO Opens From Today For Locals and Nepalese Employed Abroad
Thu, Jun 22, 2023 9:38 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Upper Lohare Hydropower Company Limited was established on November 10, 2017, as a private limited company. Later, the company was converted into a public limited company. The company is developing an Upper Lohare Hydropower Project in the Dailekh district. The project is a run-of-the-river type project with an installed capacity of 4MW.
About the issue:
Upper Lohare Hydropower Company Limited will be issuing its IPO to the project-affected locals of Dailekh District and Nepalese citizens working abroad from today i.e. on 7th Ashad and close on 21st Ashad, 2080. Note that for the locals of Dailekh District, if the issue is not subscribed by the early closing date, the issue can be extended till the 5th Shrawan. 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. 50.98 Crores of which 10% i.e. 509,804 unit shares worth Rs. 5.09 crores have been allocated to project-affected locals of Dailekh District. Meanwhile, 39% of the company's issued capital i.e. 19,88,236 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 198,824 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 25,000 units.
NIC Asia Capital Limited has been appointed as the issue manager. The promoter-public share ratio will be 59: 49 after this IPO.
Click here for the offer letter
| Upper Lohare Hydropower Company Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 5,098,040.00 | 509,804,000.00 |
| Total Issue (Project-affected Locals) | 10% | 509,804.00 | 50,980,400.00 |
| Total Issue (Nepalese citizens working abroad) | 3.90% | 198,824.0 | 19,882,400.00 |
| Issue Manager | NIC Asia Capital Limited | ||
| Issue Open Date | 7th Ashad | ||
| Issue Closing Date (earliest) | 21st Ashad | ||
| Issue Late Closing Date (for locals only) | 5th Shrawan | ||
| Minimum Application | 10 | ||
| Maximum Application | 25,000 | ||
Capital Structure:
| Authorized Capital | 600,000,000.00 |
| Issued Capital | 509,804,000.00 |
| Current Paid-Up Capital | 260,000,000.00 |
| Capital after IPO Issuance | 509,804,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 2,600,000.00 | 260,000,000.00 | 51% | Already issued |
| Project-Affected Locals | 509,804.00 | 50,980,400.00 | 10% | To be issued |
| General Public (Including Nepalese citizens working abroad) | 1,988,236.00 | 198,823,600.00 | 39% | To be issued |
Project Information:
| Name of Project | Mathillo Lohare Sana Jalbidhyut Yojana |
| Type of Project | Run-of-River |
| Installed Capacity | 4 MW |
| Electricity Generation License received | Poush 16, 2075 |
| Generation Valid Date | Poush 15, 2110 |
| RCOD | Shrawab 09, 2079 |
| Total Cost | Rs. 94.72 Crores |
| Cost per Megawatt in Rs. | Rs. 23.62 Crores |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Kedar Nath Poudel | Chairman |
| Mr. Laxman Thapa Shrestha | Managing Director |
| Mrs. Rajya Laxmi Gurung | Director |
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 | 147,300,000 | 199,300,000 | 219,300,000 | 260,000,000 | 509,804,000 | 509,804,000 | 509,804,000 |
| Reserve & Surplus | (1,929,907) | (3,390,277) | (4,676,030) | (5,304,390) | (5,865,369) | 17,036,316 | 46,441,089 |
| Debt | 306,023,501 | 430,634,035 | 567,599,910 | 602,599,910 | 465,315,345 | 440,717,355 | 413,565,777 |
| Revenue | - | - | - | - | - | 113,696,149 | 117,107,034 |
| Interest Expenses | - | - | - | 2,013.56 | - | - | - |
| Net Profit | (420,996.00) | (1,460,370.00) | (1,285,752.00) | (628,360.64) | (1,189,332.00) | 22,901,678.00 | 29,404,772.00 |
| Earnings per share (Rs.) | (0.29) | (0.73) | (0.59) | (0.25) | (0.23) | 4.49 | 5.77 |
| Net worth per share (Rs.) | 98.69 | 98.30 | 97.87 | 97.95 | 98.85 | 103.34 | 109.11 |
| Debt-Equity (times) | 2.11 | 2.20 | 2.64 | 2.37 | 0.92 | 0.84 | 0.74 |
| Return on Equity (%) | (0.03) | (0.07) | (0.06) | (0.02) | (0.02) | 0.43 | 0.53 |
Positive Aspects:
1) The income from the project is exempted from income tax for the first 10 years, so the dividend rate is higher.
2) Insurance is utilized to mitigate the risks associated with the entire structure, machinery, equipment, and tools involved in hydroelectric projects.
3) Since the company has skilled young manpower, this company has been successful in the development and construction of hydropower projects in Nepal.
4) The future of this company is bright as it is dedicated to research and development work in the field of hydropower.
Care Ratings Nepal:
CRNL has assigned a ‘CARE-NP BB- (Is)’ rating to Upper Lohore Khola Hydropower Company Limited (ULKH). Issuers with this rating are considered to have a moderate risk of default regarding the timely servicing of financial obligations in Nepal.
Key Rating Strength
- Strong promoters and experienced management team.
- The power purchase agreement with sufficient period coverage.
- Favorable Government policies toward the power sector.
Key Rating Weaknesses
- Residual project implementation and funding risk.
- Hydrology risk associated with run-of-the-river power generation with low power evacuation risk.
- Exposure to volatile interest rate risk.
- Exposure to regulatory risk.
