Upper Tamakoshi Hydropower to finally float 2.64 crore units shares as IPO; Issuance to be conducted on the third week of Ashadh

The wait for the Initial Public Offering (IPO) of Upper Tamakoshi Hydropower Limited (UTHPL) is finally about to come to an end. As per the information received, the hydropower company is all set to issue IPO from Ashadh 24, 2075.

The IPO will be issued in two phases i.e. for the locals of the project affected area and for the general public.

The IPO issuance has been in much controversy as the locals of the project affected area had been protesting against the share distribution modality of Upper Tamakoshi’s IPO issuance.

Citizen Investment Trust and Sunrise Capital have been appointed as the issue manager for the IPO issuance.

The hydropower company will be issuing 10% of the capital to the locals. The hydropower company will be issuing 1,05,90,000 unit shares at a par value of Rs 100. After the conclusion of first phase, the company will be issuing 15% shares to the general public. UTHPL will be floating 1,58,85,000 unit shares for the general public.

Previously, the hydropower company had issued and allotted 24% shares to the members of Employee Provident Fund, Employees of the institutions providing the loans and employees of Nepal Electricity Authority. It has issued 2.53 crore unit shares worth Rs 2.53 arba in the previous issue.

The majority share (51%) of Upper Tamakoshi has been hold by four public entities, namely, Nepal Electricity Authority (NEA), Nepal Telecom (NTC), Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS). NEA has 41% stake, NTC has 6% and CIT & RBS each has 2% stake in the Company. Similarly, general public and residents of Dolakha District will have 15% and 10% share respectively. The remaining 24% share is being taken over by contributors in Employees Provident Fund (EPF), NEA & Companys staffs and staffs of financial institutions providing loans.

The country’s largest hydropower project is located 68km from Charikot, the district headquarters of Dolkha.

ICRA Nepal has assigned Grade 4 rating to the IPO issuance indicating below average fundamentals.

The IPO of the Upper Tamakoshi will be the biggest in the capital market of the Nepal in terms of volume of shares. It has been constructing 456-MW hydropower project. It has paid-up capital of Rs 10.59 billion. The tunnel of hydropower project was completed yesterday after almost five years since the construction started in 2011. It is the largest capacity hydropower project in the country and it has 8.4 km longest tunnel which has been constructed so far.