Overview
Collection Center
Company Profile
Arun Kabeli Power Limited was incorporated on 17th January 2011 under Company Act of Nepal, 2063. The company is by Arun Valley Hydropower (24% shareholding after IPO) and Api power Limited (3.34% shareholding after IPO). The company is a part of Arun Valley Hydropower Group and has been established as a Special PurVichal for the construction and operation of 25 MW Kabeli B1 Hydro Electricity Project. Arun Valley Hydropower Group is owned by Mr. Guru Prasad Neupane, the largest shareholder in most of the hydropower sector of Nepal. The group investment of Arun Valley Group spans across real estate sector, hydropower sector and banking Sector etc.
25 MW Kabeli B1 Hydro Electricity Project is being developed along Kabeli river (near the confluence with Iwa River and Kabeli River) in Panchthar district of Eastern Nepal near Panchthar-Taplejung border.
The electricity generated from this project shall be connected to proposed NEA substation at Amarpur VDC in Panchthar district; 5Km away from the powerhouse of Kabeli B1. Arun Hydropower Kabeli has already received power generation license for Kabeli B1 and Power Purchase Agreement (PPA) was signed on July 13, 2012 with Nepal Electricity Authority (NEA) for entire generation capacity.
Major Promoter
Board of Director
Capital Structure
Financial Highlights
Share Capital and Reserve
The data from FY 2070/71 to FY 2072/73 is actual one whereas the data from FY 2073/74 on ward till FY 2077/78 is predicted one.
Long Term Loan
Income from Sale of Electricity
Net Profit and Loss
Earnings per Share
Net Worth Per share
Return on Equity
Return on Assets
Key Financial & Company overall Financial Aspects
The strength of this hydropower is the highly experienced promoter group involved in this project. The promoter group of the hydropower company is involved in numerous hydro projects in Nepal. The promoters are involved in real state, banking and hydropower sector of the company.
Arun Kabeli Hydro Project (25 MW) is a large private sector hydropower project currently under development in Nepal. Upfront equity injection and low prevailing interest rates should bring down IDC (Interest During Construction)component and hence the overall project cost.
Grading concerns also emanate from the typical implementation risks in hydro projects such as increase in time and cost estimates on account of difficult conditions which can potentially impact the project return indicators in addition to hydrology risks.
The earning per share of company is still negative till the ongoing F/Y 2073/74 and its earning per share will be positive with above industry average after the generated income from sales of power.
The Net Worth per Share of company is below Rs 100 in FY 2073/74 due to huge amount of negative reserve. However, the company plans to reduce its negative reserve balance in future and the net worth per share will be positive in FY 2074/75.Going forward, ability of the company to commission the project within the budgeted time , cost estimates and availability of sufficient hydrology will be the key parameters which can impact returns of the project. Timely construction of the transmission line will also be a key factor in determining the returns generated by the project.
The company will not generate income as it has no sales of power till FY 2074/75 which is the main reason for the hydropower company’s loss.
However, the company’s turning point will be in FY 2074/75 with generation of revenue from sales of electricity in that fiscal year. The company holds huge amount of long term loan. The huge amount of loan also increases its interest expenses which affects in net profit or earning per share. The company’s Returning on Equity and Return on assets is also positive in 2074/75 that shows the company’s performance and financial improvement in future.
Conclusion
At present, investors are attracted in IPO shares because people think that return from share market is better than from other investment sector. Fix deposit services at BFIs provide 8 to 10 percent return but the return from IPO shares is almost double in less than a year. After IPO of Arun Kabeli Hydropower, many companies will issue IPO and FPO shares. Hence investors should not pour all their money into a single company rather investment diversification seems to be good. Investors are investing in Arun Kabeli Hydropower to get attractive return in the long run. Investors should also consider SEBON Guidelines of big investors (More than Rs 50,000) and small investors (less than Rs 50,000) criteria.
