Nepal Electricity Authority (NEA) to issue IPO at premium price

The Nepal Electricity Authority (NEA), set to launch an Initial Public Offering (IPO) at an enhanced value, has secured a 'Double A Plus' credit rating for its operations in Nepal.

The 'Double A Plus' rating, granted by ICRA Nepal, marks the second consecutive year that NEA has attained this rating. Organizations with a 'Double A Plus' rating exhibit a robust ability to meet their financial obligations promptly. Dealing with such entities presents a minimal risk of loan default.

ICRA Nepal conducted an extensive evaluation of NEA, assessing its financial health, assets, commercial and financial risks, managerial competence, and internal and external factors influencing operational effectiveness. The credit rating of the authority stems directly from this comprehensive assessment.

Following this evaluation, NEA has formally submitted a proposal to the Ministry of Finance to initiate the issuance of the company's shares to the general public in accordance with the Nepal Electricity Authority Act of 1984, following the completion of its third financial restructuring.

NEA's authorized capital currently stands at around NPR 300 billion, with intentions to publicly offer 10 percent of it.

Through this proposed public offering, NEA aims to raise approximately NPR 60 billion, inclusive of premiums.

According to the authority's proposal, the objective is to maintain the book value of NEA's shares at around NPR 125, with the additional amount serving as a premium for the share issuance.