CRNL has assigned ‘CARE-NP IPO Grade 4’ grading to the proposed Initial Public Offering (IPO) of NRN Infrastructure and Development Limited (NRNIL). ‘CARE-NP IPO Grade 4’ indicates Below Average Fundamentals. NRNIL is proposed to come out with IPO of 3.398046 Million equity shares having face value of Rs.100 each at par aggregating Rs.339.8046Million.
The grading assigned to NRNIL is constrained by concentrated investment in hydropower sector and long gestation period of its investments, concentrated revenue profile, expected time overrun and project implementation risk related to various under construction projects and lower return on Net worth in short to medium term. The grading also factors in hydrology risk associated with run-of-the-river power generation affecting profitability of the company.
The grading, however, derives strength from strong and reputed promoters/ directors, projects being developed by strong and experienced group, moderate financial risk profile and debt free investment plan. The grading also considers shortage of power in the country, government support for the power sector and generation license obtained & power purchase agreement concluded for the plants.
NRN Infrastructure and Development Limited (NRNIL) is public limited company, incorporated on September 16, 2012 as NRN Investment Limited, later the name was changed to NRN Infrastructure and Development Limited with effective from February 02, 2017. NRNIL was promoted by a group of Non-Resident Nepali (NRN) under the Companies Act, 2006 and complying the provision of Act relating with Non-Resident Nepali, 2008. The main purpose of NRNIL is to make investment in the infrastructure sectors with collective investment from various groups of people employed in foreign countries thereby mobilizing the remittance income to more productive sectors. Promoters of the company has injected Rs.792.88 Mn paid up capital, including stock dividend, till April 04, 2019. After the issuance of Rs.339.80 Mn proposed IPO, promoter-public shareholding will be in the ratio of 70:30.
Source: Care Ratings Nepal