Following approval from the Securities Board of Nepal (SEBON), the issuance of Initial Public Offerings (IPOs) has gained momentum in the Nepali capital market. As of now, eight companies that have already received regulatory approval are yet to issue their IPOs to the general public. These companies are Palpa Cement Industries, Solu Hydropower, Hotel Forest Inn, Shikhar Power Development, Super Khudi Hydropower, Suryakunda Hydroelectric, Ridgeline Energy, and Bhujung Hydropower.
According to the Securities Registration and Issuance Regulations, companies must open their public share offerings within two months of receiving approval for their prospectus or issuance documents. As per the same regulation, companies are required to issue IPOs ranging between 10 percent and 49 percent of their issued capital, unless otherwise specified by the regulator.
Among the approved companies, Solu Hydropower is set to open its IPO to the general public first, starting from January 13 (Poush 29) until January 18 (Magh 4). The company will issue 8.2 million shares to the public after allocating shares to locals, migrant workers, and mutual funds. Solu Hydropower operates the 82 MW Lower Solu Hydropower Project in Solukhumbu, with an estimated cost of NPR 19.88 crore per megawatt. As per its latest financials, the company’s net worth per share stands at NPR 137.53, while earnings per share are NPR 4.45.
Super Khudi Hydropower is currently issuing IPOs to project-affected locals of Lamjung and Nepalis working abroad. The company plans to issue 20 percent of its NPR 1.55 billion issued capital. It operates the 26 MW Upper Khudi Hydropower Project in Lamjung, with a per-megawatt cost of NPR 20.69 crore. The company has reported earnings per share of NPR 4.45 and retained earnings of NPR 465.3 million, and has received a BB rating from CARE Ratings Nepal.
Palpa Cement Industries, which produces cement under the “Tansen” brand, is issuing shares in the first phase to locals of Palpa and Nawalparasi West and to migrant workers, after which it will open the IPO to the general public. The company plans to issue 20 percent of its NPR 3.75 billion issued capital, amounting to 7.5 million shares. Its net worth per share is NPR 135.74, and the IPO will be issued at a par value of NPR 100.
Suryakunda Hydroelectric Company has already issued shares to locals and migrant workers and will soon issue shares to the general public. The company plans to issue 1.379 million shares, equivalent to 20 percent of its NPR 689.6 million issued capital. It operates the Upper Tadi Khola Hydropower Project in Nuwakot, with a cost of NPR 21.53 crore per megawatt. The company’s net worth per share is NPR 94.77, while earnings per share stand at a negative NPR 0.31. It has received a BB-minus rating from CARE Ratings.
Bhujung Hydropower Company is preparing to issue shares worth NPR 200 million, equivalent to 20 percent of its NPR 1 billion issued capital. Shares have already been allocated to locals and migrant workers. The company operates the 7.5 MW Upper Midim Hydropower Project in Lamjung, with a cost of NPR 24.9 crore per megawatt and a payback period of 9.65 years. It has received a B-plus rating from ICRA Nepal.
Hotel Forest Inn has also received SEBON approval to issue IPOs. The company plans to issue 4 million shares, representing 20 percent of its NPR 2 billion issued capital, while the remaining 80 percent will be held by promoters. Located within the Shivapuri forest area, the hotel has yet to publish its prospectus. The IPO will be issued at a par value of NPR 100, with NIC Asia Capital serving as the issue manager.
Shikhar Power Development Company plans to issue 3.2 million shares, equivalent to 32.65 percent of its NPR 980 million issued capital, to the general public. The company operates the 4.96 MW Bhimkhola Small Hydropower Project, with a per-megawatt cost of NPR 24.18 crore. As per unaudited financials for FY 2081/82, the company’s net worth per share is NPR 91.13, while earnings per share are negative at NPR 3.69. ICRA Nepal has assigned the company a BB rating.
Ridgeline Energy is preparing to issue 1.379 million shares, representing 20 percent of its NPR 1.185 billion issued capital, to the public. The remaining 80 percent will be held by promoters. The company operates the 9 MW Super Chepe Hydropower Project in Gorkha district.
With multiple IPOs lined up, investors can expect increased activity in the primary market in the coming weeks.
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