Things To Know For The Prospective Investors of Rawa Energy Development; IPO Opens From Today For Project-Affected Locals and Nepalese Employed Abroad
Thu, Apr 6, 2023 9:55 AM on IPO/FPO News, Company Analysis,
Company Profile:
Rawa Energy Development Ltd is a public limited company, incorporated on August 16, 2009, as a private limited company and later converted to a public limited company on June 28, 2019. It is promoted by business persons having long experience in hydropower and other sectors for setting up Hydroelectric Projects (HEP) in the territory of Nepal. The company has a 3 MW Upper Rawa Khola Small Hydropower Project (URKHP) in Khotang District which has been in commercial operation since September 20, 2020. The project is constructed under BOOT (Build, Own, Operate, and Transfer) mechanism.
About the issue:
Rawa Energy Development Limited will be issuing its IPO to the project-affected locals of Khotang District and Nepalese citizens working abroad from today i.e. on 23rd Chaitra and close on 7th Baisakh, 2080. Note that for the locals of Khotang District, if the issue is not subscribed by the early closing date, the issue can be extended till the 22nd Baisakh. 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. 28 Crores of which 10% i.e. 2,80,000 unit shares worth Rs. 2.8 crores have been allocated to project-affected locals of Khotang District. Meanwhile, 20% of the company's issued capital i.e. 560,000 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 56,000 units 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 2,800 units.
Prabhu Capital Limited has been appointed as the issue manager. The promoter-public share ratio will be 70: 30 after this IPO.
Click here for the offer letter
| Rawa Energy Development Limited | |||
|---|---|---|---|
| Particulars | Percentage | Units | Amount |
| Total Capital | 100% | 2,800,000.00 | 280,000,000.00 |
| Total Issue (Project-affected Locals) | 10% | 280,000.00 | 28,000,000.00 |
| Total Issue (Nepalese citizens working abroad) | 2.00% | 56,000 | 5,600,000.00 |
| Issue Manager | Prabhu Capital Limited | ||
| Issue Open Date | 23rd Chaitra | ||
| Issue Closing Date (earliest) | 7th Baisakh | ||
| Issue Late Closing Date (for locals only) | 22nd Baisakh | ||
| Minimum Application (For Project-affected locals) | 10 | ||
| Maximum Application (For Project-affected locals) | 10,000 | ||
| Minimum Application (For Nepalese Employed Abroad) | 10 | ||
| Maximum Application (For Nepalese Employed Abroad) | 2,800 | ||
Capital Structure:
| Authorized Capital | 280,000,000.00 |
| Issued Capital | 280,000,000.00 |
| Current Paid-Up Capital | 196,000,000.00 |
| Capital after IPO Issuance | 280,000,000.00 |
Shareholding Structure:
| Number of Shares | Amount | Percentage | Remarks | |
|---|---|---|---|---|
| Promoters Shareholders | 1,960,000.00 | 196,000,000.00 | 70% | Already issued |
| Project-Affected Locals | 280,000.00 | 28,000,000.00 | 10% | To be issued |
| General Public (Including Nepalese citizens working abroad) | 560,000 | 56,000,000.00 | 20% | To be issued |
Board of Directors:
| Name | Position |
|---|---|
| Mr. Badri Prasad Gautam | Chairman |
| Mr. Rajendra Prasad Gautam | Director |
| Mr. Gopal Prasad Niure | Director |
| Mr. Rajan Kumar Dahal | Director |
| Mr. Matuka Prasad Niraula | Independent Director |
| Mr. Bharat Raj Pokharel | Director |
| Mr. Muktinath Timsina | Director |
Project Information:
| Name of Project | Rawa Khola Sana Jalbidhyut Yojana |
| Type of Project | Run-of-River |
| Installed Capacity | 3 MW |
| Electricity Generation License received | Falgun 26, 2073 |
| Generation Valid Date | Falgun 25, 2108 |
| RCOD | Ashoj 14, 2077 |
| Total Cost | Rs. 64.65 Crores |
| Cost per Megawatt in Rs. | Rs. 21.55 Crores |
Financial Statement:
| Financial Highlights | |||||||
|---|---|---|---|---|---|---|---|
| Particulars | Actual | Estimated | |||||
| 2076/77 | 2077/78 | 2078/79 | 2079/080 (Q1) | 2079/80 | 2080/81 | 2081/82 | |
| Total Paid-Up Capital ('000) | 145,030.00 | 160,080.00 | 196,000.00 | 196,000.00 | 280,000.00 | 280,000.00 | 280,000.00 |
| Reserve & Surplus ('000) | - | (1,734.00) | (32,999.00) | (37,751.00) | 7,248.00 | 966.00 | 8,419.00 |
| Debt ('000) | - | - | - | - | - | - | - |
| Revenue ('000) | - | 4,039.00 | 42,911.00 | 21,955.00 | 97,891.00 | 100,828.00 | 103,853.00 |
| Interest Expenses ('000) | - | - | - | 8,201.00 | 40,328.00 | 33,606.00 | 31,993.00 |
| Net Profit ('0000) | - | - | - | (4,751.00) | 25,751.00 | 36,215.00 | 41,053.00 |
| Earnings per share (Rs.) | - | (1.10) | (16.00) | - | 9.20 | 12.90 | 14.70 |
| Net worth per share (Rs.) | 78.15 | 80.15 | 77.45 | - | 102.58 | 100.34 | 103.26 |
| Debt-Equity (times) | - | - | - | - | - | - | - |
| Return on Equity (%) | - | - | - | (0.30) | 0.90 | 1.29 | 1.42 |
CARE Ratings:
CARE Ratings Nepal Limited (CRNL) has assigned the issuer rating assigned of ‘CARE-NP BB (Is)’ to Rawa Energy Development Limited. Issuers with this rating are considered to have a moderate risk of default regarding the timely servicing of financial obligations in Nepal.
Credit strengths
- Experienced board members and management team in the hydropower sector.
- A power purchase agreement with sufficient period coverage.
- Favorable Government policies towards the power sector.
Credit challenges
- Project stabilization risk.
- Relatively high project cost and leveraged capital structure.
- Hydrology risk associated with run-of-the-river power generation.
- Risk of Natural Calamities.
- Exposure to volatile interest rates.
- Exposure to regulatory risk.
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