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

Wed, Jan 18, 2023 8:53 AM on IPO/FPO News, Company Analysis, Latest,

Company Profile:

Sanima Middle Tamor Hydropower Limited was established and incorporated in the year 2016 as a Special Purpose Vehicle (SPV) Company with its Office located at Dhumbarahi, Kathmandu Nepal for the implementation and operation of the Middle Tamor Hydropower Project. It is promoted by individual promoters from different backgrounds, institutional investors majorly related to the Sanima Hydro group, Non-resident Nepalis, and other institutions which include Banks, Insurance, and investment companies. SMTHL is one of the sister organizations of Sanima Hydro Group which was initiated with the establishment of Sanima Hydropower Limited in 1999 B.S. Sanima Hydropower Ltd. was established as a public company with the primary objective of harnessing the vast potential of Nepal’s hydropower sector. The company developed and commissioned Sunkoshi Small Hydropower Plant (2.6 MW) in the year 2005. It is setting up a 73 MW run-of-river, Middle Tamor Hydropower Project in the Taplejung district of Nepal. The project is constructed under the BOOT (Build, Own, Operate, and Transfer) mechanism.

About the issue:

Sanima Middle Tamor Hydropower Limited will be issuing its IPO to the project-affected locals of Taplejung District and Nepalese citizens working abroad from today i.e on 4th Magh and close on 18th Magh, 2079. Note that for the locals of Taplejung District, if the issue is not subscribed by the early closing date, the issue can be extended till the 4th Falgun. 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. 3.33 Arba of which 10% i.e. 33,32,500 unit shares worth Rs. 10 crores have been allocated to project-affected locals of Taplejung District. Meanwhile, 15% of the company's issued capital i.e. 49,98,750 unit shares will be issued later for the general public. Of this public issue, 10% of the shares totaling 499,875 units shares have been allocated for Nepalese citizens working abroad, the issue of which will open today.

The minimum application quantity to be applied for both project-affected locals and Nepalese citizens working abroad is 10 units while the maximum quantity is 20,000 units. Sanima Capital Limited has been appointed as the issue manager.

Click here for the offer letter

Sanima Middle Tamor Hydropower Limited 
Particulars Percentage Units Amount
Total Capital 100%       33,325,000.00     3,332,500,000.00
Total Issue (Project-affected Locals) 10%         3,332,500.00        333,250,000.00
Total Issue (Nepalese citizens working abroad) 1.50%             499,875.00           49,987,500.00
Issue Manager Sanima Capital Limited    
Issue Open Date 4th Magh    
Issue Closing Date (earliest) 18th Magh    
Issue Late Closing Date (for locals only) 4th Falgun    
Minimum Application  10    
Maximum Application 20,000    

Capital Structure:

Authorized Capital        3,500,000,000.00
Issued Capital        3,332,500,000.00
Current Paid-Up Capital        2,332,750,000.00
Capital after IPO Issuance         3,332,500,000.00

Shareholding Structure:

  Number of Shares Amount Percentage Remarks
Promoters Shareholders                      23,327,500.00        2,332,750,000.00 70.00% Already issued
Employees of the company                         1,666,250.00            166,625,000.00 5.00% Already issued
Project-Affected Locals                         2,332,750.00            233,275,000.00 10% To be issued
General Public (Including Nepalese citizens working abroad)                         4,998,750.00            499,875,000.00 15.00% To be issued

Project Information:

Name of Project Middle Tamor Jalbidhyut Yojana
Type of Project Run-of-River
Installed Capacity 73 MW
Electricity Generation License received Jestha 29, 2074
Generation Valid Date Jestha 21, 2110
RCOD 26th Bhadra 2080
Total Cost  Rs. 13.33 Arba
Cost per Megawatt in Rs. Rs. 18.26 Crores

Board of Directors:

Name  Position
Mr. Binaya K. Shrestha Chairman
Ms. Usha Khatiwada Director
Er. Braj Bhusan Chaudhary Independent Director
Mr. Apar Neupane Director
Er. Shiv Kumar Basnet 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)        725,125.00    2,332,750.00   2,499,375.00     2,499,375.00    3,332,500.00    3,332,500.00     3,332,500.00
Reserve & Surplus ('000)          44,880.00          15,217.00       (39,189.00)         (46,133.00)     (106,046.00)        224,796.00         651,203.00
Debt ('000)                         -                           -                          -                            -                           -                           -                             -  
Revenue ('000)                         -                           -                          -                            -                           -      2,366,048.00     2,437,029.00
Interest Expenses ('000)                         -                           -                          -                            -                           -      1,099,725.00     1,051,307.00
Net Profit ('0000)        (20,644.00)       (30,066.00)       (56,597.00)           (6,944.00)       (66,290.00)        330,841.00         426,406.00
Earnings per share (Rs.)                  (2.85)                  (1.29)                 (2.26)                   (0.28)                  (1.99)                     9.93                    12.80
Net worth per share (Rs.)                106.18                100.65                 98.43                   98.15                  96.82                106.75                 119.54
Debt-Equity (times)                         -                           -                          -                            -                           -                           -                             -  
Return on Equity (%)                  (0.27)                  (0.13)                 (0.23)                   (0.03)                  (0.21)                     0.93                      1.07

CARE Ratings:

CARE Ratings Nepal Limited (CRNL) has reaffirmed the rating of ‘CARE-NP BB’ to the long-term bank facilities of Sanima Middle Tamor Hydropower Limited.

Key Rating Weaknesses

  • Project implementation risk.
  • Power evacuation risk.
  • Hydrology risk associated with run-of-the-river power generation.
  • Exposure to regulatory risk.

Key Rating Strengths

  • Experienced board members and management team in the hydropower sector.
  • The power purchase agreement with sufficient period coverage.
  • Favorable Government policies toward the power sector.