Chirkhwa Hydropower to Issue IPO Shares to General Public from Ashwin 23

Following the issuance of shares to local residents and Nepalese citizens working abroad in the initial phase, Chirkhwa Hydropower Limited is now preparing for the second phase of its Initial Public Offering (IPO), which will make shares available to the general public. The IPO for the general public is scheduled to commence on the 23rd of Ashwin in the year 2080 BS. In this second phase, the company will be offering a total of 859,300 shares. The primary closing date for this offering is scheduled for the 26th of Ashwin, with the possibility of an extension to the 3rd of Kartik, 2080, should the subscription not reach its full capacity.

Previously, the company issued 400,000 shares to individuals affected by the project in Bhojpur District. However, only 204,700 shares were assigned to eligible applicants, leaving 195,300 shares unclaimed by these project-affected individuals. These unallocated shares have now been combined with the 800,000 shares (equivalent to 20% of the total issued capital) reserved for the general public, resulting in a total of 995,300 shares available for public subscription.

Out of the total 995,300 shares, 80,000 have already been distributed and allocated to Nepalese citizens working abroad, while 40,000 have been designated for mutual funds, and an additional 16,000 shares have been set aside for company employees. The remaining 859,300 shares are open for subscription by the general public.

ICRA Nepal has reaffirmed its issuer rating of [ICRANP-IR] BB- (pronounced ICRA NP issuer rating double B minus) for Chirkhwa Hydropower Limited.

The responsibility of overseeing this issue has been entrusted to RBB Merchant Banking Limited. Potential applicants have the opportunity to submit applications for a minimum of 10 units and a maximum of 100,000 units.

Chirkhwa Hydropower Limited, founded in January 2009, is presently engaged in the development of the Chirkhwa Hydroelectric Project, located in the Bhojpur District. This project is classified as a run-of-the-river type hydroelectric project and boasts an installed capacity of 4.7 MW.

The estimated cost for the completion of the project amounts to Rs. 99.80 crores, equating to a per MW cost of Rs. 21.23 crores.

The company has already entered into a Power Purchase Agreement (PPA) with the Nepal Electricity Authority. Under this agreement, the company will supply electricity at the rate of Rs. 4.8 per unit during the wet season and Rs. 8.4 per unit during the dry season. Additionally, there is a provision for a 3% annual escalation on the base tariff for the initial five years.