Ridi Hydropower’s IPO from Feb 16

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    KATHMANDU, Feb 9:

     Ridi Khola HEP PowerhouseRidi Hydropower Development Company (RHDC) is floating 1.17 million units of primary shares with face value of Rs 100 each from February 16.

    The company had received the go-ahead from the Securities Board of Nepal (Sebon) – the stock market regulator — to issue shares worth Rs 117 million on February 3. The IPO will continue till February 20.

    The 2.4-megawatt capacity project has been developed on Ridi River that borders Gulmi and Palpa districts. It has allocated 58,500 units of shares to three mutual funds — Nabil Balance-1, Siddhartha Investment Growth Scheme-1 and Nagarik Yekanka Yojana – on proportional basis and 23,500 units to its employees.

    According to the company, one should apply a minimum of 50 units of shares while the maximum limit has been fixed at 10,000 units. The company has appointed Civil Capital Market as the issue manager and Elite Capital as the joint issue manager.

    With the issuance of primary shares, the paid-up capital of the company will reach Rs 300 million. Kuber Mani Nepal, director of the RHDC, told Republica that they were planning to utilize the money collected from the IPO to develop Iwa Khola Hydropower Project (10 MW) in Panchthar district. “The issuance of primary shares will help to change the perception that Nepal´s hydropower companies are not transparent,” he said, adding that the company anticipates an overwhelming response to the IPO.

    Nepal said he expects the company´s IPO to be oversubscribed by 10 times. “If the attraction of investors toward primary issues in recent years is anything to go by, our IPO could be oversubscribed by 20 times,” he added.

    RHDC would be the sixth hydropower company to issue primary shares. So far, Arun Valley Hydropower Development Company, Butwal Power Company, Chilime Hydro Power Company, National Hydro Power Company and Sanima Mai Hydropower have gone public. Similarly, Upper Tamakoshi Hydro Power (UTHP) has sought permission of Sebon to float 25.42 million units of shares, while Barun Hydropower Company has applied at Sebon to issue 243,000 units of shares to the people in the project affected area.

    In recent years, IPOs have been attracting investors in droves. Anjan Raj Poudel, former president of Stock Brokers´ Association of Nepal, told Republica that the investors are lured toward IPOs as the shares they bought go up once they are listed in the secondary market. “Most of these investors are from the secondary market and they invest their money with the expectations of good return in short span of time,” he said.

    Source : Republica