ICRA Nepal assigns IPO Grade 3 to proposed 10.25 lakh units IPO shares of Radhi Bidhyut Company

ICRA Nepal has assigned “[ICRANP] IPO Grade 3” to the proposed IPO of Radhi Bidhyut Company Limited, indicating average fundamentals. Radhi Bidhyut is proposing to issue Initial Public Offering of 10,25,000 units shares to be floated at a par value of Rs 100 per share. Of the total shares,  2,60,450 shares has already been issued to residents of project-affected area (Lamjung district) while remaining 7,64,550 shares will be issued to the general public, mutual funds and the company’s staffs. As per ICRA Nepal, the assigned grading factors in healthy financial profile of RBCL which owns and operates 4.4 MW Radhi HEP since its commissioning in June 2014. Healthy financial profile of RBCL emanates from low cost of project commissioning (~NPR 139 million per MW) and steady operational performance of the project (net PLF of ~58% during past two years) which translates into adequate profitability levels. The grading also factors in the rich experience of the promoters and management personnel of Radhi Bidhyut in the field of hydroelectricity projects (HEP) development and operation. RBCL is one of the subsidiaries of CEDB Hydro Fund (CHF) which has operational hydropower projects of ~8.5 MW1 capacity under its different subsidiaries and associated companies; with first project in operation since 2002. Radhi Bidyut Company Limited operates a 4.40 MW Radhi Small Hydropower Project in Lamjung district that has been generating electricity since Jestha 31, 2071 and is connected to the national grid. The authorized capital of company is Rs 1.50 arba.  The paid up capital of the company remains at Rs 30.75 crore. After the IPO, the promoter – people of affected area (Lamjung district) – public shareholding structure of the company will be 75% – 10% – 15%. ICRA Nepal assigns IPO grading on a scale of IPO Grade 1 through IPO Grade 5, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor fundamentals.