Daramkhola Hydro Energy IPO Approved by SEBON: Issuance to Locals and Foreign Nepalese Opens

The Securities Board of Nepal (SEBON) has approved the Initial Public Offering (IPO) of Daramkhola Hydro Energy Limited, paving the way for the company to issue 39,50,000 shares to the public at a par value of Rs. 100 per share. The IPO offering represents 38.33% of the company’s total issued capital, as part of its plan to raise capital and expand investor participation in the hydropower sector.

IPO Offering Timeline and Breakdown

The IPO is being launched in phases, beginning with an issuance for project-affected locals and Nepalese citizens working abroad, followed by a general public offering at a later date.
From Ashadh 9 to Ashadh 23, 2082, the company will offer:

10,30,500 units to the locals of Gulmi and Baglung districts
2,91,950 units to Nepalese working abroad

If the issue to locals is not fully subscribed by the early closing date, it may be extended until Shrawan 6, 2082. However, the closing date for foreign Nepalese is fixed and will not be extended.

Total Allocation Plan

Out of the total 39.5 lakh unit shares being issued by Daramkhola Hydro Energy Limited, 10%—equivalent to 10,30,500 units have been reserved for project-affected locals from Gulmi and Baglung districts. The remaining 28.33%, or 29,19,500 units, are allocated for the general public. Within this public allocation, 10% (2,91,950 units) are set aside for Nepalese citizens working abroad, 2% (58,390 units) for the company’s employees, and 5% (1,45,975 units) for mutual funds. The remaining 24,23,185 units will be made available to the general public at a later date.

Application Limits

For the IPO issued by Daramkhola Hydro Energy Limited, the minimum and maximum application limits have been defined based on the applicant category. Project-affected locals from Gulmi and Baglung districts can apply for a minimum of 10 units and up to a maximum of 50,000 units. Meanwhile, Nepalese citizens working abroad are allowed to apply for a minimum of 10 units and a maximum of 10,000 units.

Company Overview Application Limits

Daram Khola Hydroelectric Limited, established in December 2015, is developing a 9.6 MW hydropower project in Baglung, Nepal, with a catchment area of 247 km² and a design discharge of 10.30 m³/s. The company is primarily promoted by local individuals, and Mr. Nar Bahadur Pun (Niraj) serves as the chairman.

Credit Rating and Issue Manager

The IPO of Daramkhola Hydro Energy Limited has been assigned a credit rating of [IRN BB-(IS)] by Infomerics Credit Rating Nepal Limited, reflecting a moderate risk level in terms of timely repayment obligations. Additionally, the rating agency has reaffirmed an IRN BB- rating for the company’s long-term bank facilities amounting to NPR 1,400 million and an IRN A4 rating for its short-term bank facilities worth NPR 1,235 million.

Laxmi Sunrise Capital Limited (LS Capital) has been appointed as the issue and sales manager for this IPO.

Conclusion

With SEBON’s approval and the IPO now underway for locals and foreign-employed Nepalese, Daramkhola Hydro Energy Ltd. is entering a crucial phase in its development journey. Investors from the project-affected areas and abroad have the opportunity to participate in a growing sector that is vital to Nepal’s energy infrastructure. The general public issue will follow soon, offering wider participation in this 9.6 MW hydroelectric venture.