Ridi hydropower IPO to be oversubscribed by 70 times

Ridi Hydropower Development Company Limited’s Initial Public Offering (IPO) of 11.70 lakh units, is oversubscribed by more than 70 times, according to the preliminary estimate.

“We collected 2.7 arba by Wednesday, which means it was oversubscribed by some 25 percent in the first three days,” a highly placed official with Civil Capital Limited told ShareSansar today.  “Going by the data pouring in from the collection centers, we are expecting the IPO to be oversubscribed by more than 70 times, may be up to 75 times.”

Long queues of applicants could be seen in all the eight collection centers from early in the morning till late into the evening. And most importantly, the IPO usually draws more money in the last day compared to the initial days combined as institutional investors turn up only on the final day.

Initially the issue manager had estimated the IPO may be oversubscribed by some 50 times.

Ridi hydropower had issued the IPO at the face value of Rs 100 per unit on February 16.

The IPO being managed by Civil Capital Market Limited and co-managed by Elite Capital Limited will close on February 20 latest.

Applicants must apply for a minimum of 50 units and could apply for the maximum of 10,000 units.

Of the total units of the primary shares, 58,500 units have been kept aside for Nabil Balanaced Fund-1, SIG1 and Nagarik Ekanaga Yogana, and additional 23,400 units have been reserved for the hydropower's staff.

It may also be noted that Ridi has already issued the IPO for 3 lakh unit equity shares to the local residents affected or in the vicinity of the 2.4 MW Ridi Khola Small Hydropower Project in October last year.

Ridi Khola Small Hydropower Project came into operation in Kartik 2066, has already sold electricity worth Rs 14.83 crore to the Nepal Electricity Authority.

The developer of the project, Ridi Hydropower Development Company was registered as a private company back in Ashwin 2057 and converted to a public undertaking in Shrawan 2063.

The company has the authorized capital of Rs 50 crore, issued capital of Rs 30 crore and the paid-up capital of Rs 18.3 crore after the issuance of the IPO to the locals.
After the issuance of the IPO to the general public, Ridi Hydropower’s paid-up will surge to Rs 30 crore.

ICRA Nepal has given Grade 3 credit rating to the IPO of the company, which had posted a net profit of Rs 2.12 crore in the last fiscal year 2069/70.

Ridi Hydropower Development Company, which is one of the companies in the group of Arun Valley and Rairang Hydropower Development Company have four projects under its belt.

Among them, three are already operational while one is under construction.

Source: sharesansar.com, 21st Feb 2014
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Ridhi Hydropower Company to issue IPO from February 16th

KATHMANDU, Feb 9: Ridi 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:myrepublica.com, 9th Feb 2014
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