AHPC posts highest turnover: Is the underdog on the rise?

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    July 3:

    buy+sellArun Valley Hydropower Power Limited (AHPC), which had not been able to rise steadily ever since its 1:1 right issue, was suddenly traded close to circuit level yesterday.

    The timing was even more surprising as this rise comes just a couple of days after the right shares were listed – when one expects the growing supply of stock to bring down the price.

    AHPC was traded at Rs 481 with a gain of Rs 48. And it continues to rise today as well.

    AHPC not only posted the highest turnover at Nepal Stock Exchange Limited (NEPSE) yesterday, it transacted more than 10 percent of the total turnover at the only stock market of the country.

    While the total turnover at NEPSE was around Rs 75 crore, AHPC’s transaction alone stood at more than Rs 8 crore.

    Still, there was a demand for more than 50,000 unit of this scrip by the time the market closed yesterday. This means that the price of the scrip will continue to rise further

    So, what triggered the rise of the ‘underdog’?

    According to those keeping a close tab on the bourse as well as this scrip, the price of AHPC stock was not being able due to none other than the promoters of the company itself.

    “AHPC’s promoter group, the Neupanes, have been offloading their stock to make further investment in subsidiary companies, including Ridi Hydropower Company Limited,” says a big investor, requesting anonymity. “The market, nonetheless, continued to absorb the supply, but the price could not rise. Hence at this time of year when institutional investors, especially the BFIs, begin to look for an opportunity to diversify their portfolio, AHPC has become a good choice.”

    As of now there are five hydropower companies listed at NEPSE as of now, though Ridi Hydropower is set to debut on Sunday.

    Among them, Chilime Hydropower Company Limited (CHCL) has risen by multiple times over the recent months and is already one of the costliest scrip at the bourse. Yesterday alone CHCL made a cool gain of Rs 100.

    The price of Sanima Mai Hydropower Company Limited (SHPC), which is still under construction and is already facing a technical snag of transmission line, hovers around Rs 700, which is overvalued in expectation that it might become another ‘Chilime’.

    Butwal Power Company Limited (BPC), which has been dogged in a series of crises over the recent years, was priced at Rs 762 yesterday.

    National Hydropower Company Limited (NHPC) was priced at Rs 192. NHPC, which was priced below the par value for years now owing to unprecedented crisis stemming from poor corporate governance and financial scams, is trying to overcome the problems over the recent months.

    Nonetheless, the extent of problem it continues to face can be understood from the fact that two groups of promoters and management still claiming the company.

    Even Ridi Hydropower, AHPC’s subsidiary company, is expected to be traded in between Rs 650 to Rs 700 – much higher than the price of the scrip of the mother company!

    It may also be noted here that AHPC is one of the listed companies to declare and distribute good dividend at the earliest.

    It gave 15 percent bonus shares for the last two fiscal years, 15 cash dividend in the fiscal year 2067/68.

    Moreover, the money collected from the rights issue will go on to fund hydropower projects being constructed by AHPC.

    The projects under AHPC are Piluwakhola Hydropower Project (3MW), Ridikhola hydropower (2.4 MW), Kabeli-B1 Hydropower (25MW), Upper Piluwakhola Hydropower – (11MW), Lower Phemekhola Small Hydropower (3.5 MW) and Upper Khimtikhola Small Hydropower Project (12MW).

    Among them, Piluwakhola and Ridikhola hydropower have been completed while the rest are in different stages of development.

    Now that the fiscal year is also drawing to an end, AHPC is very likely to continue to grow in days to come as it provides a good opportunity for the investors of all sorts, including the BFIs and insurance companies to invest in this stock as the cross-holding is not a problem here.

    Source : ShareSansar