Things to Know Before Applying for IPO of Upper Syange Hydropower, IPO for Locals and Nepalese Employed Abroad Opens from Today

Mon, May 15, 2023 7:32 AM on IPO/FPO News, Company Analysis, Latest,

Company Profile:

Upper Syange Hydropower Limited is a public company, incorporated on January 26, 2009, as Upper Syange Hydropower Private Limited and converted to Public limited on March 30, 2017. It is promoted by both individual and institutional promoters from different backgrounds. It is setting up of a 2.4 MW Run-of-River (RoR), Upper Syange Hydropower Project (USHP) in BOOT (Build, own, Operate, and Transfer) mechanism and located at Lamjung district of Nepal.

About the issue:

Upper Syange Hydropower Limited will be issuing its IPO to the project-affected locals of Lamjung District and Nepalese citizens working abroad from today 1st Jestha and close on 16th Jestha, 2080. Note that for the locals of Lamjung District, if the issue is not subscribed by the early closing date, the issue can be extended till 30th Jestha. However, the issue will not be extended from the early closing date for Nepalese citizens working abroad.

The issued capital of the company is Rs. 22 Crores of which 10% i.e. 2,20,000 unit shares worth Rs. 2.2 crores have been allocated to project-affected locals of Lamjung District. Meanwhile, 29.55% of the company's issued capital i.e. 650,000 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 65,000 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open on the date mentioned above.

For the project-affected locals, the minimum application quantity is 10 units while the maximum quantity is 100,000 units. Meanwhile, for Nepalese citizens working abroad, the minimum application quantity is 10 units while the maximum quantity is 50,000 units.

Siddhartha Capital Limited has been appointed as the issue manager. The promoter-public share ratio will be 60.45: 39.55 after this IPO.

Click here for the offer letter

Upper Syange Hydropower Limited
Particulars Percentage Units Amount
Total Capital 100%    2,200,000.00     220,000,000.00
Total Issue (Project-affected Locals) 10%        220,000.00       22,000,000.00
Total Issue (Nepalese citizens working abroad) 2.95%          65,000.00         6,500,000.00
Issue Manager Siddhartha Capital     
Issue Open Date 1st Jestha    
Issue Closing Date (earliest) 16th Jestha    
Issue Late Closing Date (for locals only) 30th Jestha    
Minimum Application (Project-affected Locals) 10    
Maximum Application (Project-affected Locals) 100,000    
Minimum Application (Nepalese citizens working abroad) 10    
Maximum Application (Nepalese citizens working abroad) 50,000    

Capital Structure:

Authorized Capital           220,000,000.00
Issued Capital           220,000,000.00
Current Paid-Up Capital           133,000,000.00
Capital after IPO Issuance            220,000,000.00

Shareholding Structure:


  Number of Shares Amount Percentage Remarks
Promoters Shareholders              1,330,000.00    133,000,000.00 60.45% Already issued
Project-Affected Locals                  220,000.00      22,000,000.00 10% To be issued
General Public (Including Nepalese citizens working abroad)                  650,000.00      65,000,000.00 29.55% To be issued

Project Information:

Name of Project Mathillo Syange Khola Sana Jalbidhyut Yojana
Type of Project Run-of-River
Installed Capacity 2.4 MW
Electricity Generation License received Jestha 25, 2074
Generation Valid Date Jestha 21, 2109
RCOD Falgun 15, 2078
Total Cost   Rs. 50.47 Crores
Cost per Megawatt in Rs. Rs. 21.03 Crores

Board of Directors:

Name  Position
MR. Bir Bahadur Ghale Chairman
Mr. Saurav Dhakal  Director
Mr. Sonam Lama  Director
MS. Deepika Gyawali  Director
Mr. Suraj Raj Bahak  Director

Financial Statement:

Financial Highlights
Particulars Actual Estimated
2076/77 2077/78 2078/079 2078/079 (Q3) 2079/80 2080/81 2081/82
Total Paid-Up Capital ('000)     26,475.00     133,000.00      133,000.00        133,000.00   220,000.00    220,000.00    220,000.00
Reserve & Surplus ('000)         (591.05)       (1,106.32)      (20,562.76)        (62,470.09)      (8,572.00)         6,108.00      25,912.00
Debt ('000)   346,498.12     351,899.28      348,700.00        347,256.68                     -                        -                       -  
Revenue ('000)                     -             14,865.02          23,633.47      76,263.52       78,545.35      80,746.44
Interest Expenses ('000)                     -                         -                          -                            -                       -                        -                       -  
Net Profit ('0000)         (533.21)           (515.27)      (19,456.44)        (41,907.33)      11,991.00       14,680.00      19,804.00
Earnings per share (Rs.)              (2.01)                (0.39)               (14.63)                (31.51)                5.45                 6.67                 9.00
Net worth per share (Rs.)              97.77                99.17                 84.54                   53.03              96.10             102.78            111.78
Debt-Equity (times)              13.39                  2.67                   3.10                     4.92                     -                        -                       -  
Return on Equity (%)              (0.21)                (0.04)                 (1.73)                   (5.94)                0.57                 0.65                 0.81

CARE Ratings:

CARE Ratings Nepal Limited (CRNL) has reaffirmed the issuer rating of ‘CARE-NP BB (Is)’ assigned to Upper Syange Hydropower Limited. Issuers with this rating are considered to have a moderate risk of default regarding the timely servicing of financial obligations, in Nepal.

Key Strengths:

  • Experienced management team in the hydropower sector with a strong institutional promoter group.
  • A power purchase agreement with sufficient period coverage.
  • Favorable Government policies towards the power sector.

Key Weaknesses:

  • Project stabilization risk.
  • High power evacuation risk.
  • Hydrology risk associated with run-of-the-river power generation.
  • Exposure to regulatory risk.
  • Exposure to volatile interest rate risk.