Looking forward to invest in Upper Tamakoshi? What would be an ideal unit to apply in Upper Tamakoshi's IPO?

Nepal's capital market is in the developing phase. In the last 4-5 years, the market made a decent progress. There was a lot of improvement in the IPO application procedure in this period. Earlier, the investors were allotted 1% of the total investment capital thus, investors with limited investment capital were allotted a small number of IPO shares. However, the new module of IPO share allotment treats every single investor equally. Previously, investors had to place an order by depositing a required sum of money at the particular bank physically but now with the introduction C-ASBA and Mero share, investors can apply for primary level shares from every corner of the world online. For those who don't have access to Mero Share, they can apply IPO share from any C-ASBA member banks.

Keeping these changes in mind, how much will be an ideal investment for Upper Tamakoshi Hydropower's IPO? 

Let us check the number of applicants in different IPOs issued within last one year

These are the IPOs issued to the general public from August 2017 to date. We have taken the exact number of IPO for the general public by excluding the shares given to Mutual Funds, employees, etc.

In the said period, more than 64.26 lakhs units IPO shares had been issued where all these issues got oversubscribed. Upper Tamakoshi is floating more than 2 times of IPO share units compared to the sum total all the IPO shares issued in last one year.

From the table above, we can say that the charm for primary shares of Microfinance is attractive whereas the applicants for IPO are in the decreasing order for the hydropower sector. The average number of applicants is around 1.77 lakhs and on average investors had applied for 1.12 crore shares on every issue since August 2017. The average number of applicants are more than 2 times the number of applicants on recently issued Aankhu Khola Hydropower's IPO.

Upper Tamakoshi hydropower is projected to issue 1.58 crore unit IPO from 15^th Kartik. However, every time a new issue is floated, there is a provision to float 5% of the total issue to the Mutual funds.

We don’t know the exact percentage of IPO that will be assigned to mutual funds but we can expect an issuance of at least 1.5 crore units IPO to the general public.

More than 13 Lakhs DMAT accounts are registered in Nepal. As per the provision, investors are allowed to hold 2 DMAT account at a time, however, some investors have more than 2 DMAT account. Thus, we can assume that there are around 11 Lakhs individual who have DMAT account in Nepal.

By considering the above data, we can expect a minimum of 2-2.5 lakhs investors for Upper Tamakoshi's IPO. Though Upper-Tamakoshi falls in the hydropower sector, there is a possibility that the number of investors could be greater than that because of the reputation and charm of the project.

With all the data's and interpretation, investors can apply for a minimum of 70 units of Rs 7,000 for IPO of Upper Tamakoshi Hydropower.