Things to Know Before Applying for IPO of Sikles Hydropower Limited, IPO for Locals Opens from Today
Fri, Jul 22, 2022 4:10 AM on IPO/FPO News, Company Analysis,
Company Profile:
Sikles Hydropower Limited (SLHL) is a public limited company, incorporated on July 28, 2004 as a private limited company and later converted to public limited company on May 17, 2019. The company is setting up 13MW run-of-the-river Madkyu Khola Hydroelectric Project (MKHP) at Kaski District of Nepal. The project came into commercial operation on April 2, 2018. The project is constructed under BOOT (Build, own, Operate and Transfer) mechanism.
About the issue:
Sikles Hydropower Limited (SLHL) will be issuing its IPO to the project-affected locals of the Kaski districts (Madi VDC Ward no. 1, 2, and 3) from Shrawan 06, and close on Shrawan 20, 2079. If not subscribed by the early closing date, the issue will close on 5th Bhadra, 2079.
A total of 8,50,000 shares will be issued at a par value of Rs. 100 per share. This is 10% of the company's issued capital of Rs. 85 crore. If the local's issue is not subscribed fully, the remnant shares will be issued along with the allocated quantity for the public issue. Locals of Madi VDC wards no. 1, 2, and 3 of Kaski District can apply for a minimum of 10 shares to a maximum of 1,00,000 shares.
This will raise the paid-up capital of the company to Rs. 85 crores after the IPO allotment. After the IPO Promoter - public share ratio would be 76.47: 23.43.
BOK Capital Market has been appointed as the issue manager for the IPO issuance.
| Sikles Hydropower Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 8,500,000.00 | 850,000,000.00 |
| Total Issue (Project-affected Locals) | 10.00% | 850,000.00 | 85,000,000.00 |
| Issue Manager | BOK Capital Market | ||
| Issue Open Date | Shrawan 06 | ||
| Issue Closing Date (earliest) | Shrawan 20 | ||
| Issue Closing Date (Late) | Bhadra 05 | ||
| Minimum Application | 10 | ||
| Maximum Application | 100,000 | ||
Capital Structure:
| Authorized Capital | 850,000,000.00 |
| Issued Capital | 850,000,000.00 |
| Current Paid-Up Capital | 650,000,000.00 |
| Capital after IPO Issuance | 850,000,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 6,500,000.00 | 650,000,000.00 | 76.47% | Already issued |
| Project Affected Locals | 850,000.00 | 85,000,000.00 | 10.00% | To be issued |
| General Public | 1,150,000.00 | 115,000,000.00 | 13.53% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Roshan K.C | Managing Director |
| Mr. Kiran K.C | Director |
| Mr. Sunil Narayan Shrestha | Executive Director |
| Mr. Nirajan Maharjan | Manager (Accounts & Administrative) |
Project Information:
| Name of Project | Madkyu Khola Jalvidhyut Aayojana |
| Type of Project | Run-of-River |
| Installed Capacity | 13 M.W |
| Electricity Generation License received | Falgun 21, 2070 |
| Generation Valid Date | Falgun 20, 2105 |
| RCOD | Chaitra 19, 2074 |
| Total Cost in Rs | 2,31,76,55,000 |
| Cost per Megawatt in Rs. | 17,82,81,154 |
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 | 650,000.00 | 650,000.00 | 650,000.00 | 650,000.00 | 850,000.00 | 850,000.00 | 850,000.00 |
| Reserve & Surplus | (53,414.00) | 23,651.00 | 109,564.00 | 147,457.43 | 126,004.00 | 174,797.00 | 240,478.00 |
| Debt | - | - | - | - | - | - | - |
| Revenue ('000) | 270,598.00 | 333,835.00 | 255,198.00 | 155,254.61 | 325,341.00 | 355,701.00 | 364,057.00 |
| Interest Expenses | 173,802.00 | 161,714.00 | 128,295.00 | 80,857.16 | 105,370.00 | 83,798.00 | 74,814.00 |
| Net Profit | (32,203.00) | 77,065.00 | 109,310.00 | 37,893.61 | 84,862.00 | 133,792.00 | 150,682.00 |
| Earnings per share (Rs.) | (4.95) | 11.86 | 16.82 | 5.82 | 9.98 | 15.74 | 17.73 |
| Net worth per share (Rs.) | 91.78 | 103.64 | 116.86 | 122.68 | 114.82 | 120.56 | 128.29 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | (0.05) | 0.11 | 0.14 | 0.05 | 0.09 | 0.13 | 0.14 |
CARE Rating:
CARE Ratings Nepal Limited (CRNL) has assigned Issuer rating of ‘CARE-NP BB+ (Is) [Double B Plus (Issuer Rating)]’ to Sikles Hydropower Limited (SLHL). Issuers with this rating is considered to have a moderate degree of safety regarding timely servicing of financial obligations, in Nepal.
Key Rating Weaknesses:
- The subdued operating performance of power project during FY21.
- Leveraged capital structure.
- Hydrology risk associated with run-of-the-river power generation.
- Exposure to the volatile interest rate.
- Exposure to regulatory risk.
Key Rating Strength:
- Strong parentage and experienced management team.
- The power purchase agreement with sufficient period coverage.
- Moderate financial performance of the company, however, impacted in FY21.
- Current demand & Supply gap however possible oversupply in the future along with moderate counterparty risk.
- Favorable Government policies towards the power sector.
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