Hydropower experts voice it quite frequently that Nepal has a potential to produce 83K MW of electricity from its white gold which has been going in total waste towards our southern neighbor. Not even a single government formed under one or other leadership hasn’t failed to give out honey-laced announcements that they would produce 10k MW or even more volume of electricity in 10-20 years while some even went on declaring that Nepal would be net exporter of electricity in couple of years or so.
The sector of hydropower time and again produces lot of vibes in both public sphere and among policy makers which is justified by the growing interest of public towards shares of hydropower trading in the secondary market of Nepal. Considering a long-time investment, there is no doubt that hydropower sector could be good investment option which has been reported time and again in different media.
Here is one such example.
Despite of having such a bright prospect in Nepal, the most unfortunate part of the story is that hydropower sector still doesn’t have any regulatory body with an authority to guide the fair and transparent transaction of this sector. The following tables summarize the contribution of hydropower sector in greater lengths and breaths to our market capitalization and ultimately to our economy.
| Hydropower |
Stock Symbol |
Total listed shares |
Market Capitalization as of Magh 25, 2074 (Rs.) |
| Api Power Company Ltd |
API |
11,340,000 |
4,309,200,000 |
| Arun Kabeli Power Ltd. |
AKPL |
15,000,000 |
4,815,000,000 |
| Arun Valley Hydropower Development Co. Ltd. |
AHPC |
9,330,123 |
1,838,034,231 |
| Barun Hydropower Co. Ltd. |
BARUN |
2,551,500 |
461,821,500 |
| Butwal Power Company Limited |
BPCL |
18,105,999 |
9,940,193,451 |
| Chhyangdi Hydropower Ltd. |
CHL |
2,700,000 |
464,400,000 |
| Chilime Hydropower Company Limited |
CHCL |
39,651,131 |
34,575,786,232 |
| Dibyashwori Hydropower Ltd. |
DHPL |
2,640,000 |
374,880,000 |
| Himalayan Power Partner Ltd. |
HPPL |
10,654,170 |
3,888,772,050 |
| Khanikhola Hydropower Co. Ltd. |
KKHC |
4,657,143 |
675,285,735 |
| National Hydro Power Company Limited |
NHPC |
13,851,862 |
1,523,704,820 |
| Nepal Hydro Developers Ltd. |
NHDL |
2,600,000 |
538,200,000 |
| Ngadi Group Power Ltd. |
NGPL |
5,355,548 |
1,242,487,136 |
| Ridi Hydropower Development Company Ltd. |
RHPC |
5,009,510 |
726,378,950 |
| Sanima Mai Hydropower Ltd. |
SHPC |
21,100,000 |
8,376,700,000 |
| Synergy Power Development Ltd. |
SPDL |
7,000,000 |
1,071,000,000 |
| United Modi Hydropower Ltd. |
UMHL |
11,500,000 |
2,691,000,000 |
| TOTAL |
183,046,986 |
Rs 77,512,844,105 |
Upcoming and Ongoing Hydropower Public Issues
| Name of the Company |
Number of units (shares) in pipeline |
Status of IPO/ FPO in pipeline |
Percentage of issue to total issue |
Total number of units (shares) after IPO/ FPO |
Total paid up amount in NPR after IPO/ FPO |
| Butwal Power Company |
4,081,000 |
FPO to the general public |
22.5% |
22,186,720 |
221.86 cr |
| Panchakanya Mai Hydropower |
1,100,000 |
IPO to project affected people |
10% |
11,000,000 |
110 cr. |
| Sanjen Hydropower Company Limited |
8,760,000 |
IPO to lending institution employees and to promoter shareholder employees and to EPF members |
24% |
36,500,000 |
365 cr. |
| Rasuwagadhi Hydropower Company Limited |
16,421,040 |
IPO to lending institution employees and to promoter shareholder employees and to EPF members |
24% |
68,421,000 |
684.21 cr. |
| Kalika Power Company |
600,000 |
IPO to project affected people |
10% |
6,000,000 |
60 cr. |
| Radhi Bidhyut Company Limited |
764,550 |
IPO to general public |
15% |
6,150,000 |
61.5 cr |
More upcoming issues can be viewed at ShareSansar's
Upcoming Issues section.
Currently, the Banking and Financial Institutions (commercial banks, development banks, finance company, microfinance) which are considered as heavy weights in the stock market have Nepal Rastra Bank as a strong regulatory body. Insurance and telecommunication sector each have Insurance Board and Telecommunication Authority respectively as regulatory bodies which are all dedicated towards ensuring good financial health and professional/ethical practices among the institutions under their jurisdiction. Nevertheless, despite of having 17 companies already trading their shares in the Nepal Stock Exchange and more companies opting to enter the market soon, it’s quite ironical that not even the government (Ministry of Energy) nor Nepal Electricity Authority and not even the independent power producers (IPPAN) have felt an urge to work for bringing the long-awaited regulator for the sector.
More than 18 crore unit of shares are being traded and 33 crore more units will soon be trading at NEPSE where fates of thousands of investors would be associated. These transactions, however, represent just a tip of an iceberg as most of these hydropower companies are still required to float crores of more shares either to the project-affected people or to the general public. Presently, the portion of hydropower sector in the market capitalization i.e. 5% of Rs 1.66 trillion may appear minimal,however, the supply of over 33 crore unit shares in upcoming months and years will undoubtedly change the scene where hydro sector will have one of the major stakes in the economy.
When all these shares end up in the market, there can be a grave situation of market manipulation and clash of interests in the absence of regulatory body. There are several ways in which the interest of investors can be cornered and even undermined by big fishes when there’s no strong regulators to yield control. For an instance, unlike other sectors, the promoters of hydropower companies can off-load all their shares in the secondary market once the locking period of 3 years gets over. In such a case, whom should the small investors and the government authorities held accountable if there arise any case of anomalies and legal hurdles?
The recent case of Everest Insurance Company can serve as the best instance here. Despite of having Insurance Board as regulator, its proposed 600% right shares landed in hot soup and finally got annulled because its original promoters had off-loaded all their shares rendering the company virtually promoter less.
Next, the ongoing FPO of Butwal Power Company wouldn’t have faced such a series of controversies, had there been some strong regulator which could have given clear directives to the companies in hydropower sector to do and not to do certain things.
What do concerned authorities have to offer?
Mr. Kulman Ghising, the current Managing Director at Nepal Electricity Authority (NEA), talking to ShareSansar, offered a quick glance in this issue. According to Mr. Ghising, the Electricity Regulatory Commission as a strong regulatory body is already in the final course of its formation. All legal procedures have already been finalized as the Act for the same has already been endorsed by the erstwhile parliament. Therefore, the most-awaited Commission needs to receive full shape which would soon take place after formation of new cabinet.
