Sanima Mai Hydropower IPO closes today, expected to oversubscribed by 20 times 

ShareSansar, Sept 24:

Sanima Mai Hydropower Limited (SMHL) is closing its Initial Public Offering (IPO) today.

The IPO has been well received in the market, according to NIDC Capital Markets Limited, the issue manager.

“The IPO was oversubscribed by two times in the first two days of its issuance,” Bijendra Nuchchhe Pradhan, an officer with NIDC Capital told ShareSansar.com. “We are currently calculating the applications for the third day. The final day has just started.”

As most of the large individual and institutional investors apply in the final day, share analysts believe that the hydropower company's IPO could easily be oversubscribed by around 20 times. 

In an interview given to ShareSansar on Friday, the CEO of the hydropower company, Tuk Prasad Paudel had said that the IPO will be oversubscribed by at least ten times.

SMHL had floated an IPO of 2,110,000 equity shares of face value Rs 100 each on Friday.

Of the 2.11 million units floated in the market, 84,400 units were reserved for its staff and 105,500 units were allotted to the mutual funds.

The allocated units to mutual funds will be equally divided among Citizen Unit Scheme, Nabil Balance Fund and Siddhartha Investment Growth Scheme-1.

The general public could bid for a minimum of 50 units to a maximum of 100,000 units.

As per its offer letter for the IPOs, Sanima Mai Hydropower Ltd has an authorized capital of Rs 2.70 billion, issued capital of Rs 1.055 billion and a paid-up capital of Rs 844 million.

The company has further stated that once the IPOs worth Rs 211 million is issued to the general public, its paid-up capital will par with issued capital.

The ICRA Nepal has ranked this IPO of Sanima Mai Hydropower Limited as Grade 3 rating, indicating the company’s average fundamentals -- ICRA Nepal assigns IPO grading on a scale of 1 (strong) to 5 (poor).

It may be noted here that earlier the hydropower company had issued its IPO for the project affected people of Ilam district. As per the SEBON rule, hydropower companies must first issue shares to the people in the project affected areas, with 100 percent allotment.

Sanima Mai Hydropower Ltd (SMHL) is promoted by a group of veteran Non Resident Nepalese professionals who have extensive experience in a number of industries which include banking, insurance, real estate, engineering, construction.

Currently, the company is developing two hydropower projects with an aggregate capacity of 29 MW. Phase I of the project is of a capacity of 22 MW and is expected to commission in July 2014 while Phase II of the project is of a capacity of 7 MW and is expected to commission in July 2015.