Khanikhola Hydropower will issue 100% rights shares, i.e Ratio of 1:1

In accordance with the decision taken during Khanikhola Hydropower Company Limited's (KKHC) recent Board of Directors meeting, the company is planning to issue rights shares at a 1:1 ratio, equivalent to 100% of its current paid-up capital.

During the board meeting held on Bhadra 24, it was resolved to issue these 100% right shares based on the existing paid-up capital of NPR 46.57 Crores. Consequently, following the issuance of 4,657,143 units of right shares, the company's paid-up capital will be revised to NPR 93.14 Crores.

The primary objective of this right share issuance is to repay outstanding bank loans. However, it's important to emphasize that obtaining approvals from two regulatory authorities, namely the Electricity Regulatory Commission and the Securities Board of Nepal (SEBON), is a prerequisite for this process.

As of September 10, 2023, the closing market price for KKHC was NPR 164.

Lets look at the overview of Khanikhola Hydropower Company Limited's financial performance and market positioning:

1. Market Capitalization: Khanikhola Hydropower Company Limited boasts a market capitalization of NPR 782,865,738.30. This figure represents the total market value of the company's outstanding shares and provides an indication of its overall worth in the stock market.

2. Paid-Up Capital: The company's paid-up capital is NPR 465,714,300.00, signifying the total amount of capital that has been invested by shareholders in the company.

3. 52 Weeks High/Low : The stock has experienced a 52-week price range of NPR 272 (high) to NPR 162 (low). This data gives investors an idea of the stock's price volatility over the past year.

4. EPSTTM (Earnings Per Share Trailing Twelve Months): With an EPSTTM of -4.90 (Book Close Adjusted), the company reported a negative earnings per share over the past twelve months. This indicates that, on average, the company incurred a loss during this period.

5. EPSReported: The reported earnings per share for FY-079-080/Q4 is -4.90, which aligns with the EPSTTM figure and confirms the negative earnings trend.

6. PERatioTTM (Price-to-Earnings Ratio Trailing Twelve Months): The PERatioTTM stands at -33.48, indicating that the stock is currently trading at a loss in relation to its earnings over the past year. The 3-5 years average PERatio is 40.60, suggesting a significant deviation from historical norms.

7. PBRatio (Price-to-Book Ratio): The PBRatio is 1.92, with a 3-5 years average of 12.22. This ratio suggests that the stock is currently trading at a lower valuation relative to its book value compared to its historical average.

8. ROETTM (Return on Equity Trailing Twelve Months): The company's ROETTM is -5.38%, indicating a negative return on equity for the past year. This means that the company's assets did not generate a positive return for shareholders during this period.

9. Book Value: The book value per share, adjusted for the closing price, is NPR 85.47. This represents the theoretical value of each share if the company were liquidated. 

In summary, Khanikhola Hydropower Company Limited appears to be facing financial challenges as indicated by its negative earnings, low PERatioTTM, and negative ROETTM. The stock is trading at a lower valuation compared to its historical norms, as suggested by the PBRatio. Investors should carefully consider these financial metrics and market conditions before making investment decisions related to this company.