Barun Hydro’s IPO sale from Falgun 17; 451,980 kitta set aside for public

ShareSansar, February 20

The initial public offering (IPO) of Barun Hydropower Company will be up for grabs from March 1st, or Falgun 17. The hydropower company is floating a total of 486,000 units of ordinary shares at face value of Rs 100.

The company has set the closing date for the IPO for March 4, or Falgun 20. The final closing date for the issue has been set for March 15, or Chaitra 1.

Civil Capital Market Limited is the issue manager for the IPO.

The company has set aside 24,300 units for mutual fund companies and other 9,720 of the total shares to the staff of BHCL. The remaining 451,980 units has been allocated for public.  

The IPO of the hydropower company received Grade 4 rating from ICRA Nepal, indicating the company’s below average fundamentals. ICRA Nepal assigns IPO grading on a scale of 1 (strong) to 5 (poor). The grading assigned is constrained by the weak operational performance of 4,500 KW Hewa Khola HEP (Hydro Electricity Project), which coupled with the high financial leverage, has resulted in weak earnings and insufficient cash flows.

The regulator of Capital Market of Nepal-Security Board of Nepal (SEBON) had given the final approval to float the IPO on on February 15.

The company has already issued shares worth NPR 24.30 million at par value to the project affected local population of Shankhuwasabha district. At present, the public shareholding in the company stands at 12.5%, which is expected to reach 30% post IPO.

The 4.5-MW project is based in Hewakhola of Sankhuwasabha district of Eastern Nepal. The project started power generation from August 6, 2011.

Established on January 20, 2004, the company had signed Power Purchase Agreement (PPA) with Nepal Electricity Authority (NEA) on September 19, 2007.

The company has authorized capital of Rs 350 million and paid-up capital of Rs 243 million (after adjustment of public shares). The major promoters of BHCL include Mr Shailendra Guragain & Family (~30%), Mr. Deda Raj Khadka and family (~5%), Mr. Arjun Gautam and family (2%).