Union Hydropower IPO receives more than 8 thousand applications on day 1; More than 20% of the issue subscribed

Union Hydropower Company Limited is issuing 3,534,340 units (including 621,790 units unsubscribed by locals) IPO shares at Rs.100 face value to the general public from today (Chaitra 13, 2075). The early closing date of this IPO issue is Chaitra 17, 2075 and if the issue is not subscribed till Chaitra 17 then this issue can be extended up to Baisakh 12, 2076.

Laxmi Capital has been appointed as the issue manager for the IPO issuance. As per the issue manager, 8,300 applicants have applied for 7.6 crore units till the end of first day. This means above 20% of the issue has been subscribed on the first day itself. Looking at the rating of the company, the issue has received more than a fair response from the investors.

Earlier, the company had issued 750,000 lakh units (10% of the issue capital) to the locals of the project affected of Lamjung district. Out of the total issue only 128,219 units were subscribed by the locals and 621,790 units remain under subscribed.

Interest can apply for a minimum of 50 units and maximum of 35,000 units of shares for a par value of Rs.100. Application can be placed from the financial institutions providing C-ASBA facility or through Meroshare.

ICRA Nepal has assigned Grade 5 rating to the IPO issue which indicates poor fundamentals.

Union Hydropower's construction of 3.3 MW Midim Khola Project had completed in 2074 and has started production and sales of electricity since Magh 15, 2074. It has also received approval for construction of 23 MW Mewa Khola Project.

The total cost of the project is Rs.79.40 Crore and per megawatt cost is Rs.26.50 Crore. Post this issue the promoter- public share structure would be 51.16 - 48.83 ratio.