Kathmandu. Himparbat Hydropower Limited is going to issue initial public offering (IPO) to the locals of the project-affected areas and the Nepalis who are in foreign employment from October 26.

The company has been allowed to issue a total of 59,15,000 units of shares at a face value of Rs 100 per share. The issued capital of the company is 35 per cent of Rs 1.69 billion.

In the first phase, the company is going to issue 16.90 lakh units of shares for the residents of the project-affected areas. Out of this, 10.14 lakh shares have been allotted for the residents of the most affected areas of the project.

Permanent residents of Bigu Rural Municipality-5, 6, 7 and 8 and Kalinchowk Rural Municipality-2, 3 and 4 of Dolakha can apply for the shares. The remaining 6.76 lakh units of shares will be distributed to the permanent residents of other wards of these two rural municipalities.

Similarly, 4,22,500 units of shares will be issued to Nepalis who are employed abroad. Nepalis working abroad can apply for the scheme after obtaining a labour permit from the concerned body of the Government of Nepal. Applicants of both groups can apply for a minimum of 10 units and a maximum of 10,000 units.

For the locals of the project-affected areas, the IPO issuance will close on November 9 at the earliest and on November 25 at the latest. For Nepalis who are in foreign employment, the application can be made till November 1 at the earliest and till November 9 at the latest.

Locals can apply for the project from Nepal Investment Bank, Sindhu Bikas Bank, Singati branch of Prabhu Bank, Sunkhani Extension counter of Laxmi Sunrise Bank and Charikot branch of Citizens Bank. The application fee will be Rs 2.

Nepalis who are in foreign employment can apply through the C-ASBA system through the designated branches of ASBA member banks and financial institutions approved by the Securities Board of Nepal. In addition, the application can also be made through the online system of CDS and Clearing Limited.

ICRA Nepal has assigned the company a ‘ICRANP Issue Rating Double B Plus’ in the rating for the IPO issuance. This rating indicates that there is an average risk to the company’s ability to meet its financial obligations.

The company is operating the 20 MW Sangu Khola Hydropower Project. The total cost of the project is Rs 3,65,17,87,254. The project has a power generation license of Rs 18,25,89,363 and the power generation license period is 28 years.

The general investment return period of this project is 6. The investment return period is 9.08 years based on 09 years and discounted rate. The company has been generating electricity from this project since October 10, 2082.

Similarly, the total cost of the 5.5 MW Sangu Khola-1 hydropower project is Rs 1,154,53,089. The project has a power generation license period of 28 years with a cost of Rs 20,91,73,289 per megawatt.

The general investment return period of this project is 6. The return period of investment based on discount rate is 29 years. It is 56 years. The company has been generating electricity from this project since July 22, 2002. Citizens Capital Limited is the issue and sale manager of the company’s shares.