Maya Khola Hydropower Issuing IPO to General Public from Magh 13
Maya Khola Hydropower Company Limited has announced its Initial Public Offering (IPO) of 19,92,000 shares, valued at Rs 100 each, with a total collection goal of Rs 19.92 crore. The IPO will be available to the general public starting on 13th Magh, 2079, with an early closing date of 17th Magh, 2079 and the potential for extension until Magh 27, 2079 if not fully subscribed.
The total 24,00,000 units of shares offered by Maya Khola Hydropower Company Limited have been divided among different groups. 10% or 240,000 units have been issued and allocated to Nepalese citizens living abroad, 2% or 48,000 units have been reserved for the company’s employees, and 5% or 120,000 units have been set aside for mutual funds. The remaining 19,92,000 units are available to the general public. After the IPO, the paid-up capital of the company will reach Rs. 1 Arba. Prior to this offering, the company had already issued 10,00,000 unit shares worth Rs. 10 crores to local residents affected by the project and 240,000 units shares to Nepalese citizens living abroad. The promoter shareholders in the company hold 66% of the shares.
Prabhu Capital Limited has been appointed as the issue manager for the IPO issuance. Applications can apply for a minimum of 10 units and a maximum of 100,000 units.
Maya Khola Hydropower IPO Details
| Company Name | Maya Khola Hydropower Company Limited |
| IPO Open Date | Magh 13 |
| IPO Close Date | Magh 17 |
| No. of Shares (General Public) | 19,92,000 |
| No. of Shares (Employees) | 48,000 |
| No. of Shares (Mutual Funds) | 120,000 |
| Issue manager | Prabhu Capital |
| ICRA Rating | [ICRANP-IR] BB- |
About Company
Maya Khola Hydropower Company is the organization that is implementing the Maya Khola Hydropower Project. The company was established as a private limited company on 28 May 2010 (14 Jestha, 2067) under registration number 73167/066/067. In May 2016 (20 Mangshir 2073), the company transformed into a public limited company in order to allow for the sale of public shares as equity.
The Maya Khola Hydropower Project located in the Sankhuwasabha district in eastern Nepal. Initially designed as a 5 MW run-of-the-river type, later revised to 14.9 MW in accordance with the norms of Nepal Electricity Authority (NEA), which uses an exceedance factor of Q40. The project can be accessed by a trunk metalled road from Dharan in eastern Nepal. The power generated by the project will be transmitted through a 3.4 km long 33 kV transmission line to a substation that Nepal Electricity Authority will build in Baneshwor.
Financial Analysis
Below tables shows company’s past, current and projected financial status. Company has expected to make profit from FY 2080/81.
Past
| Year/Details | 2075/76 | 2076/77 | 2077/78 |
| Net Worth (Rs.) | 92.01 | 90.03 | 88.53 |
| EPS (Rs.) | (4.24) | (3.18) | (3.25) |
| Retained Earnings | (27,682,780) | (40,667,990) | (56,730,450) |
Present and Forecasted
| Year/Details | 2078/79 | 2079/80 | 2080/81 | 2081/82 |
| Net Worth (Rs.) | 91.9 | 96.71 | 101.46 | 103.77 |
| EPS (Rs.) | 0.5 | 2.06 | 4.75 | 7.31 |
| Retained Earnings | (53,428,130) | (32,685,660) | 146,22,710 | 37,691,660 |
Board of Directors of the Company
The company is run by 5 board of directors, chaired by Mr. Bijaya Man Sherchan.
| Name | Position |
| Bijaya Man Sherchan | Chairman |
| Dinesh Prasad Shrestha | Director |
| Binod Thakali | Director |
| Hem Nidhi Sharma | Director |
| Dina Nath Dahal | Director |
IRCA Rating
ICRA Nepal has confirmed Maya Khola Hydropower Company Limited’s issuer rating of [ICRANP-IR] BB- (pronounced ICRA NP issuer rating double B negative) (MKHCL). This grade indicates that the issuer is at a moderate risk of default in terms of timely servicing of financial obligations.
ICRA Nepal has additionally renewed [ICRANP] LBB- (pronounced ICRA NP L double B minus) to MKHCL’s long-term limitations, as well as [ICRANP] A4 (pronounced ICRA NP A four) to its short-term restrictions.
Key Strengths
- Presence of experienced institutional promoters
- Low evacuation risks given availability of NEA’s evacuation structures
- Reduced project execution risks
- Low tariff and offtake risks
Major Weaknesses
- Relatively high project cost, following recent escalation
- Higher penalties and loss of tariff escalations in case of unexpected delays
- Lack of deemed generation clause in the PPA
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