Overview
Collection Centre
Company Profile
Dibyashwari Hydropower Limited was established in 2063 B.S under Companies Act, 2063. The company was converted into a public limited company on 2069/07/03. The basic objective of the company is to generate electricity through utilization of water resources abundantly available in the country.
Major promoters of the company include One O One Company Limited (17.04% holdings after IPO) and BG Hydro Investment (5.68% holding); promoter: public holding to be diluted to 75:25 post proposed IPO, assuming full subscription. The project cost estimated at time of financial closure was NPR 723 million to be funded in debt to equity ratio of 70:30; subsequently project cost has been revised to ~NPR 844 million owing to cost escalations.
The company under took the task of developing 4 MW project in Sabhakhola river at Dhupu VDC of Sankhuwasabha district at Eastern Development region as its first project. The PPA of 3300 KW i.e 3.3 MW was signed through Nepal Electricity Authority in 2068/11/17 and the project extend its capacity of generating electricity of 4 MW and did its amendment PPA of 4 MW in 2070/08/19.
Project Financing:
Dibyashwari Hydropower Ltd has availed financing service from four financial institutions for its 4 MW Sabakhola Hydroelectric Project. Nepal Bank Limited is the lead bank and other participating financial institutions are NIDC Development Bank, Kasthamandap Development Bank and ACE Development Bank.
Shareholder Structure
Major Shareholder
Board of Director
Financial highlights
Financial analysis
The company had no sale of power till FY2071/72 which resulted into loss burden due to increased operating cost. At the end of current FY2072/73, the company projected the electricity sales of NPR 3.79 crore.
The company will be in break-even in the FY 2073/74 and projected to book net profit of Rs. 1.58 crore due to increment in sales by more than 200%. However, the sales growth of FY 2074/75 does not include increment in sales of electricity.
In additional, the project is also entitled to a capital subsidy of NRP 5 Million per MW from government and an additional 10% of the same. If it is able to connect the produced electricity on national grid on time and cost estimated achieving required operating parameters , the efficiency of evaluation infrastructure will be the key parameters which can impact return of the project .
Earnings per share (EPS) are expected to turn positive with Rs 6 and Rs 6.93 in FY2073/74 and FY 2074/75 respectively which is still below industry average. 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.
The company has not disclosed any cash and stock dividend plans in forecasted financial statement as the company’s balance sheet portrays negative reserve.
The assigned grading factors in the weak project profile as reflected in the high project costs (NPR 211 million per MW of the 4 MW hydel project being developed by DBHLin addition to limited experience of promoters and management personnel in development and operation of hydro power projects. Since the tariff for hydro projects less than 25 MW are fixed (NPR 4.8/kWh for wet season i.e. from the period of Mid-April to Mid-December and NPR 8.4/kWhfor dry season i.e. from the period of Mid-December to Mid-April), the returns of a project will be subdued if the cost of the project is high.
The project is nearing completion and 92% of the construction activities have been completed. With the completion of the hydropower project, electricity will be generated contributing in company’s income.
In recent scenario IPO is becoming more alluring to new investors entering in capital market. The IPO may be oversubscribed highly because of its small IPO size, excess liquidity in market and less alternative investment outlets.
