Things to know for prospective investors about IPO (to locals) of Chandragiri Hills Limited; IPO issue opens from today

Company Profile:

Chandragiri Hills is a quick getaway just 7 km away from Thankot, Kathmandu. Established with a mission to create an “integrated tourist destination” has its historical significance as well. It was established in 2009 and located in Chandragiri hills. This project provides cable car services to the peak of the hill with religious importance, parks, and restaurants. The cable car operated on August 08, 2016. Initially, the company was named Kathmandu Fun Park Private Limited during registration and later was converted into a public limited company, however, the name was changed to Chandragiri hills limited on May 16, 2016.

The company is promoted by 15 individuals with Mr. Hem Raj Dhakal and Mr. Chandra Prasad Dhakal as the largest shareholders with a 21.8% stake each. Mr. Chandra Prasad Dhakal is the chairman of the company.

About the Issue:

The company is issuing 306,819 units as IPO to the project-affected area at the par value of Rs. 100 per share to raise a capital worth Rs. 3.06 crores.

The company is set to issue a total of 3.06 lakhs units of shares i.e 2% of the total issue from Mangsir-17, 2077. The company will issue IPO for the project-affected locals in the first lot. The earliest closing date is Poush-1, 2077. If the issue is not subscribed till the earliest closing date then the issue will be extended till Poush-16, 2077.

Global IME Capital Limited has been appointed as the issue manager.

ICRA Rating:

ICRA Nepal has assigned an issuer rating of [ICRANP-IR] BB to the proposed Initial public offering (IPO) of Chandragiri Hills Limited (CHL). ICRA Nepal has assigned a long-term rating of [ICRANP] LBB to the long-term loans and a short-term rating of [ICRANP] A4+ to the short-term loans of CHL. The ratings are on Watch with negative implications.

Key Grading Strengths:

• Financially resourceful promoters
• Unique tourist attraction contributing to good revenue base over a short period of time
• The tourism sector remains a priority for the government

Key Challenges:

• Covid-19 pandemic would have a significant impact on the hospitality sector
• Weak financial profile with high leverage and sub-par coverages ratios
• Limited track record of operations for cable car; project stabilization risk high for the resort
• The fragmented hotel industry and increasing competition

Board Members:

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