Things to Know Before Applying for IPO of Eastern Hydropower (EHL), IPO for Locals Opens from Today
Tue, Aug 23, 2022 9:55 AM on IPO/FPO News, Company Analysis, Latest,
Company Profile:
Eastern Hydropower Limited (EHL) is a public company, incorporated on August 4, 2017, promoted by institutional as well as individual promoters from different background. It is currently operating a 5 MW Pikhuwa Khola Small Hydropower Project (PKSHP) in run –of –river scheme located at Bhojpur district, Nepal. The project has been constructed under BOOT (Build, own, Operate and Transfer) mechanism.
About the issue:
Eastern Hydropower Limited (EHL) will be issuing its IPO to the project-affected locals of Bhojpur district from today i.e. 7th Bhadra and close on 21st Bhadra, 2079. If unsubscribed, the issue can be extended up to 5th Ashoj, 2079.
6,20,000 unit shares will be issued at a par value of Rs. 100 per share. This is 10% of the company's issued capital. Locals of the Bhojpur District can apply for a minimum of 10 shares to a maximum of 1,00,000 shares. After the allotment of the IPO shares, the Promoter - Public share ratio would be 80 : 20.
NMB Capital has been appointed as the issue manager.
| Eastern Hydropower Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 6,200,000.00 | 620,000,000.00 |
| Total Issue (General Public) | 10% | 620,000 | 62,000,000.00 |
| Issue Manager | NMB Capital Limited | ||
| Issue Open Date | Bhadra 07 | ||
| Issue Closing Date (earliest) | Bhadra 21 | ||
| Issue Closing Date (Late) | Ashoj 05 | ||
| Minimum Application | 10 | ||
| Maximum Application | 100,000 | ||
Capital Structure:
| Authorized Capital | 62,00,00,000 |
| Issued Capital | 62,00,00,000 |
| Current Paid-Up Capital | 49,60,00,000 |
| Capital after IPO Issuance | 62,00,00,000 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 4,960,000.00 | 496,000,000.00 | 80% | Already issued |
| Project-Affected Locals | 620,000.00 | 62,000,000.00 | 10% | To be issued |
| General Public | 620,000.00 | 62,000,000.00 | 10% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Dhan Bahadur Shrestha | Chairman |
| Mrs. Shova Devi Karmacharya | Member |
| Mr. Dev Raj Rai | Member |
| Mr. Pushpa Raj Sharma | Member |
| Mr. Shashi Raj Shrestha | Member |
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 ('000) | 465,000.00 | 465,000.00 | 496,000.00 | 496,000.00 | 620,000.00 | 620,000.00 | 620,000.00 |
| Reserve & Surplus ('000) | (34,114.00) | (103,137.00) | (137,228.00) | (136,463.00) | (114,990.00) | (69,995.00) | (17,791.00) |
| Debt ('000) | - | - | - | - | - | - | - |
| Revenue ('000) | 2,585.00 | 89,047.00 | 99,631.00 | 133,672.00 | 153,487.00 | 165,836.00 | 168,508.00 |
| Interest Expenses ('000) | (7,629.00) | (100,466.00) | (69,554.00) | (62,860.00) | (54,638.00) | (47,830.00) | (43,064.00) |
| Net Profit ('0000) | (16,367.00) | (69,023.00) | (34,091.00) | 765.00 | 21,472.00 | 44,996.00 | 52,204.00 |
| Earnings per share (Rs.) | (3.52) | (14.84) | (6.87) | 0.15 | 3.46 | 7.26 | 8.42 |
| Net worth per share (Rs.) | 92.66 | 77.82 | 72.33 | 72.49 | 81.45 | 88.71 | 97.13 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | (0.38) | (1.91) | (0.95) | 0.02 | 0.43 | 0.82 | 0.87 |
CARE Ratings:
CARE Ratings Nepal Limited (CRNL) has revised Issuer rating to ‘CARE-NP B+ (Is)’ to Eastern Hydropower Limited (EHL). Issuers with this rating are considered to have high risk of default regarding timely servicing of financial obligations in Nepal.
Key Strengths:
- Experienced board members and management team.
- Power purchase agreement with sufficient period coverage.
- Favourable Government policies towards power sector.
Key Weaknesses:
- Improvement in debt servicing track record.
- Subdued operating performance.
- Improvement in financial profile in FY21 though continued to remain modest.
- Power evacuation risk.
- Hydrology risk associated with run-of-the-river power generation.
- Exposure to volatile interest rate.
- Exposure to regulatory risk.
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