Modi Energy Limited IPO Opens From Today For Project-Affected Locals and Nepalese Employed Abroad

Thu, Mar 9, 2023 7:13 AM on IPO/FPO News, Company Analysis, Latest,

Company Profile:

Modi Energy Limited was incorporated as Manang Trade Link Pvt Ltd on November 04, 1996. Later on, the name was changed to Modi Energy Pvt Ltd on May 28, 2017. The company got converted into a public limited on June 21, 2018. The company has been promoted by institutional promoters and individual businessmen having long experience in various sectors for setting up the Hydroelectric Project (HEP) of the 20 MW run-of-river, Tallo Modi Khola Hydropower Project (TMKHP). The project is being constructed under the “BOOT” (Build, Own, Operate, and Transfer) model and is located in the Parbat district of Nepal. It came into operation on September 30, 2021.

About the issue:

Modi Energy Limited will be issuing its IPO to the project-affected locals of Parbat District and Nepalese citizens working abroad from today i.e on 25th Falgun and close on 9th Chaitra, 2079. Note that for the locals of Ilam District, if the issue is not subscribed by the early closing date, the issue can be extended till 24th Chaitra. However, the issue will not be extended from the early closing date for Nepalese citizens working abroad.

The issued capital of the company is Rs. 2.9 Arba of which 10% i.e. 29,00,000 unit shares worth Rs. 29 crores have been allocated to project-affected locals of Parbat District. Meanwhile, 15% of the company's issued capital i.e. 43,50,000 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 435,000 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open today.

For the project-affected locals, the minimum application quantity to be applied is 10 units while the maximum quantity is 1000 units whereas for the Nepalese citizens working abroad, the minimum application quantity to be applied is 10 units and the maximum quantity is 100,000 units.

Sunrise Capital Limited has been appointed as the issue manager.

Click here for the offer letter

Modi Energy Limited
Particulars Percentage Units Amount
Total Capital 100%    29,000,000.00   2,900,000,000.00
Total Issue (Project-affected Locals) 10%             2,900,000       290,000,000.00
Total Issue (Nepalese citizens working abroad) 1.5%          435,000.00         43,500,000.00
Issue Manager Sunrise Capital    
Issue Open Date 25th Falgun    
Issue Closing Date (earliest) 9th Chaitra    
Issue Late Closing Date (for locals only) 24th Chaitra    
Minimum Application (Project-affected Locals) 10    
Maximum Application (Project-affected Locals) 1,000    
Minimum Application (Nepalese citizens working abroad) 10    
Maximum Application (Nepalese citizens working abroad) 100,000    

Capital Structure:

Authorized Capital    2,900,000,000.00
Issued Capital    2,900,000,000.00
Current Paid-Up Capital    2,175,000,000.00
Capital after IPO Issuance     2,900,000,000.00

Shareholding Structure:

  Number of Shares Amount Percentage Remarks
Promoters Shareholders          21,750,000.00    2,175,000,000.00 75% Already issued
Project-Affected Locals                   2,900,000        290,000,000.00 10% To be issued
General Public (Including Nepalese citizens working abroad)             4,350,000.00        435,000,000.00 15% To be issued

Project Information:

Name of Project Tallo Modi Khola Hydropower Project
Type of Project Run-of-River
Installed Capacity 20 MW
Electricity Generation License received Bhadra 20, 2068
Generation Valid Date Bhadra 20, 2102
RCOD Ashad 31, 2077
Total Cost  Rs. 6.2 Arba
Cost per Megawatt in Rs. Rs. 31.03 Crores

Board of Directors:

Name  Position
Mr. Kumud Kumar Dugar Chairperson
Mr. Vikas Dugar Director
Mr. Jahan Singh Phuyal Director
Mr. Deepak Kumar Mundara Director
Ms. Shubhi Agrawal Director
Mrs. Ranjana Tiwari Director

Financial Statement:

Financial Highlights
Particulars Actual Estimated
2076/77 2077/78 2078/79 2079/80 (Q1) 2079/80 2080/81 2081/82
Total Paid-Up Capital ('000)    1,000,000.00   1,000,000.00   1,000,000.00     2,175,000.00    2,900,000.00   2,900,000.00   2,900,000.00
Reserve & Surplus ('000)        (63,324.00)       (68,216.00)       (74,340.00)      (526,597.00)     (360,632.00)     (356,198.00)     (316,092.00)
Debt ('000)          3,371,673         3,372,074         3,381,712           4,073,744          3,393,336         3,120,249         2,826,527
Revenue ('000)                          -                           -                          -                 162,152              629,626             648,979             668,874
Interest Expenses ('000)                          -                           -                          -                            -                           -                           -                           -  
Net Profit ('0000)          (5,230.00)         (4,892.00)         (6,088.00)      (194,680.00)        (91,648.00)            4,434.00         40,105.00
Earnings per share (Rs.)                   (0.52)                  (0.49)                 (0.61)                 (15.21)                  (3.45)                    0.15                    1.38
Net worth per share (Rs.)                   93.66                  93.18                 92.57                   87.63                  87.56                  87.72                  89.10
Debt-Equity (times)                     3.60                    3.62                    3.65                      2.47                     1.34                    1.23                    1.09
Return on Equity (%)                   (0.06)                  (0.05)                 (0.07)                   (1.18)                  (0.36)                    0.02                    0.16

CARE Ratings:

CARE Ratings Nepal Limited (CRNL) has revised the Issuer Rating of Modi Energy Limited to “CARE-NP D (Is)” from “CARENP BB+ (Is)”. Issuers with this rating are considered to be in default or are expected to be in default soon.

Key Rating Weaknesses

  • Ongoing delays in the repayment of bank loan obligations.
  • Project Stabilization issues amid high power evacuation risk.
  • Relatively High project cost amid significant time and cost overrun.
  • Hydrology risk associated with run-of-the-river power generation.

Key Rating Strengths

  • Experienced promoters, directors, and management in various sectors.
  • The power purchase agreement with sufficient period coverage, although reduced economic life.