Things To Know For The Prospective Investors of Mai Khola Hydropower: IPO Opens From Today For Project-Affected Locals and Nepalese Employed Abroad

Thu, Mar 9, 2023 7:12 AM on IPO/FPO News, Company Analysis, Latest,

Company Profile:

Mai Khola Hydropower Limited is a private company established in the year of 2073 B.S. The first (pilot) project of Mai Khola Hydropower Ltd. is Super-Mai Cascade Hydropower Project (3 Mw), which is going to be commenced in the very near future. It is designed to take water by tapping water from Super Mai Hydropower Project (7.8 MW) Tailrace Canal, generating 18.30 GWh of energy.

About the issue:

Mai Khola Hydropower Limited will be issuing its IPO to the project-affected locals of Ilam District and Nepalese citizens working abroad from today i.e on 25th Falgun and close on 9th Chaitra, 2079. Note that for the locals of Ilam District, if the issue is not subscribed by the early closing date, the issue can be extended till 24th Chaitra. 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. 39.21 Crores of which 10% i.e. 392,157 unit shares worth Rs. 3.92 crores have been allocated to project-affected locals of Ilam District. Meanwhile, 39% of the company's issued capital i.e. 15,29,411 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 152,941units shares have been allocated for Nepalese citizens working abroad, the issue of which will open today.

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

Prabhu Capital Limited has been appointed as the issue manager. The promoter-public share ratio will be 51: 49 after this IPO.

Click here for the offer letter

Mai Khola Hydropower Limited
Particulars Percentage Units Amount
Total Capital 100%    3,921,568.00    392,156,800.00
Total Issue (Project-affected Locals) 10%              392,157      39,215,700.00
Total Issue (Nepalese citizens working abroad) 3.9%        152,941.00      15,294,100.00
Issue Manager Prabhu Capital    
Issue Open Date 25th Falgun    
Issue Closing Date (earliest) 9th Chaitra    
Issue Late Closing Date (for locals only) 24th Chaitra    
Minimum Application (Project-affected Locals) 10    
Maximum Application (Project-affected Locals) 10,000    
Minimum Application (Nepalese citizens working abroad) 10    
Maximum Application (Nepalese citizens working abroad) 50,000    

Capital Structure:

Authorized Capital           400,000,000.00
Issued Capital           392,156,800.00
Current Paid-Up Capital           200,000,000.00
Capital after IPO Issuance            392,156,800.00

Shareholding Structure:

  Number of Shares Amount Percentage Remarks
Promoters Shareholders             2,000,000.00           200,000,000.00 51% Already issued
Project-Affected Locals                       392,157             39,215,700.00 10% To be issued
General Public (Including Nepalese citizens working abroad)             1,529,411.00           152,941,100.00 39% To be issued

Project Information:

Name of Project Super Mai Cascade Hydropower Project
Type of Project Run-of-River
Installed Capacity 3 MW
Electricity Generation License received Falgun 05, 2075
Generation Valid Date Falgun 04, 2110
RCOD Shrawan 01, 2078
Total Cost  Rs. 61.13 Crores
Cost per Megawatt in Rs. Rs. 20.37 Crores

Board of Directors:

Name  Position
Mr. Shailendra Guragain Chairperson
Dr. Bhusan Guragain Managing Director
Mr. Dinesh Gurung Director

Financial Statement:

Financial Highlights
Particulars Actual Estimated
2076/77 2077/78 2078/79 2079/80 (Q1) 2079/80 2080/81 2081/82
Total Paid-Up Capital ('000)    750,000.00    1,140,000.00    2,000,000.00   2,000,000.00    3,921,568.00    3,921,568.00   3,921,568.00
Reserve & Surplus ('000)                      -            58,408.24       233,435.67                        -          154,522.36        389,409.19       654,597.17
Debt ('000)      3,424,519          4,157,543          4,078,858         4,017,952          2,033,908          1,897,795         1,757,638
Revenue ('000)                      -                698,466             703,188             473,224              781,210              803,169             825,810
Interest Expenses ('000)                      -                            -                           -                          -        
Net Profit ('0000)                      -            58,408.24       175,027.43         97,207.28        131,613.01        234,886.83       265,187.98
Earnings per share (Rs.)                      -                            -                           -                          -                           -                           -                           -  
Net worth per share (Rs.)            181.91                127.93                111.67                        -                  103.94                109.93               116.69
Debt-Equity (times)                 4.57                     3.47                    1.83                    2.01                     0.50                     0.44                    0.38
Return on Equity (%)                      -                       0.49                    0.78                    0.49                     0.32                     0.54                    0.58

ICRA Nepal:

ICRA Nepal has assigned an issuer rating of [ICRANP-IR] BB+ (pronounced ICRA NP issuer rating double B plus) to Mai Khola Hydropower Limited. Issuers with this rating are considered to have a moderate risk of default in the timely servicing of financial obligations.

Credit Strengths

  • Experienced promoters.
  • Improving generational performance.
  • Lower power evacuation risk.
  • Moderate gearing and adequate coverage ratios.
  • Low tariff risk, given long-term PPA at predetermined tariffs and escalations.

Credit Challenges

  • Natural calamities, interest rate volatility, and concentration risks.
  • Limited liquidity cushion.
  • High hydrology risks amid lack of deemed generation clause in PPA.