Mandakini Hydropower (MAHCL) IPO For Locals Opens From Today; All information You Need To Know In One Place

Wed, Jun 15, 2022 10:16 AM on IPO/FPO News, Company Analysis, Exclusive,

Company Profile:

Mandakini Hydropower Company Limited (MAHCL) is an Independent Power Producers Association Nepal (IPP) of Nepal, owns the Sardi Khola Hydropower Station. It is a run-of-river hydroelectric plant located in the Kaski District of Nepal. The flow from the Sardi River is used to generate 4 MW of electricity. The plant started generating electricity from 2074-08-23 BS. The generation license will expire in 2105-03-12 BS, after which the plant will be handed over to the government. The power station is connected to the national grid and the electricity is sold to Nepal Electricity Authority.

About the issue:

Mandakini Hydropower Company Limited (MAHCL) will be issuing its IPO to the project-affected locals of Kaski District from 1st Ashadh and close on 15th Ashadh, 2079. If unsubscribed, the issue can be extended up to 30th Ashadh, 2079.

5,88,037 unit shares will be issued at a par value of Rs. 100 per share. This is 10% of the company's issued capital Rs 58.80 crore. If the local's issue is not subscribed fully, the remnant shares will be issued along with the allocated quantity for the public issue. Locals of Machhapuchchre VDC wards no. 2, 3, 4, and 6 of Kaski District can apply for a minimum of 10 shares to a maximum of 1,00,000 shares. This will raise the paid-up capital of the company to Rs. 58.80 crores after the IPO allotment. After the IPO Promoter - Public share ratio would be 70: 30.

BOK Capital Market has been appointed as the issue manager for the IPO issuance.

Click here for offer letter

Mandakini Hydropower Limited
Particulars Percentage Units Amount
Total Capital 100% 58,80,369 58,80,36,900
Total Issue (Project-affected Locals) 10.00% 5,88,037 5,88,03,700
Issue Manager B.O.K Capital Market     
Issue Open Date 1st Ashad    
Issue Closing Date (earliest) 14th Ashad    
Issue Closing Date (Late) 30th Ashad    
Minimum Application 10    
Maximum Application 100,000    

Capital Structure:

Authorized Capital 65,00,00,000
Issued Capital 58,80,36,900
Current Paid-Up Capital 41,16,25,900
Capital after IPO Issuance  58,80,36,900

Shareholding Structure:

  Number of Shares Amount Percentage Remarks
Promoters Shareholders 41,16,259 41,16,25,900 70.00% Already issued
Project Affected Locals 5,88,037 5,88,03,700 10.00% To be issued
General Public 11,76,073 11,76,07,300 20.00% To be issued

Project Information:

Name of Project Sardikhola Jalvidhyut Aayojana
Type of Project Run-of-River
Installed Capacity 4 MW
Electricity Generation License received Ashadh 13, 2070
Generation Valid Date Ashadh 12, 2105
RCOD Mangsir 23, 2074
Total Cost in Rs 83,10,12,000
Cost per Megawatt in Rs. 20,77,00,000

Financial Statement:

Financial Highlights
Particulars Actual Estimated
2075/76 2076/77 2077/78 2078 (Q3) 2078/79 2079/80 2080/81
Total Paid-Up Capital    172,002,100.00   385,000,000.00   411,625,900.00   588,036,900.00   588,036,901.00     588,036,902.00
Reserve & Surplus   (20,676,345.02)      (6,687,474.77)        8,442,722.64     54,971,383.20     75,972,034.08     102,761,763.74
Debt    466,688,619.26   445,415,625.23   409,893,365.30   323,393,366.00   636,758,069.80     553,558,069.80
Revenue ('000)      92,271,024.85   104,867,148.04     96,571,011.90   92,748,093.46   124,229,943.72   124,229,943.72     124,229,943.72
Interest Expenses       51,668,347.34      46,143,589.06     38,067,023.02  2,23,36,842.17      33,484,676.93     57,946,556.90       51,137,969.40
Net Profit      (1,087,705.55)      13,988,870.25     15,130,197.41   34,535,855.32     46,528,660.56     21,000,650.87         2,789,729.67
Earnings per share (Rs.)                      (0.63)                         3.63                        3.68                        7.91                        3.57                          4.56
Net worth per share (Rs.)                      88.00                      98.00                    102.00                    109.00                    113.00                     117.00
Debt-Equity (times)                         3.08                         1.18                        0.98                        0.50                        0.96                          0.80
Return on Equity (%)                      (0.01)                         0.04                        0.04                        0.07                        0.03                          0.00







CARE Ratings:

CARE Ratings Nepal Limited (CRNL) has assigned Issuer rating of ‘CARE-NP BB+ (Is) [Double B Plus (Issuer Rating)]’ to Mandakini Hydropower Limited (MHL). Issuers with this rating is considered to have a moderate degree of safety regarding timely servicing of financial obligations, in Nepal.

Key Strengths:

  • Experienced promoter/directors and management team.
  • The power purchase agreement with sufficient period coverage.
  • Moderate financial performance of the company, however, gearing ratio is expected to be increased in future.
  • Low Power evacuation risk.
  • Current demand & Supply gap however possible oversupply in the future along with moderate counterparty risk.
  • Favorable government policies towards the power sector.

Key Weaknesses

  • Project implementation and funding risk in case of USHP.
  • The subdued operating performance of the Sardi Khola Hydropower Project.
  • Hydrology risk associated with run-of-the-river power generation.
  • Exposure to regulatory risk.