Upcoming IPO - Balefi Hydropower Limited

Balefi Hydropower Limited Upcoming IPO Share in Nepal

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Balefi Hydropower Limited

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Balephi Hydropower Limited (BHL) was converted into a public limited company on January 6, 2017, to facilitate public participation. The paid-up capital of the company, at June-end 2019, was ~NPR 1,462 million and was fully held by the promoters.

After the proposed IPO, the same would reach ~NPR 1,828 million. The major promoters include Mr. Shakti Kumar Golyan (18.25%), Mr. Shulav Agrawal (18.25%), Mr. Shushil Gupta (17.50%), Mr. Shandeep Kumar Sharda (15%), Mrs. Prabha Goyanka (Bhimshariya) (9.95%), and Mr. Umesh Kasaju (8.68%). After the proposed IPO issue, the promoter holding is expected to dilute to 80%, assuming full subscription of all the issues by the public.

ICRA Nepal has assigned a grading of [ICRANP] IPO Grade 4+ to the proposed initial public offering (IPO) of Balephi Hydropower Limited (BHL), indicating below-average fundamentals. ICRA Nepal assigns IPO gradings on a scale of 1 to 5, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor fundamentals.

BHL is proposing to come out with an IPO of 3,655,940 equity shares with a face value of NPR 100 each, at par. The proceeds would be utilized towards the development of the 36-MW Upper Balephi “A” hydroelectric project.

Global IME Capital is appointed the issue manager for the IPO. The application was submitted on Falgun 25.

The PPA was signed with the NEA on December 15, 2015, for the 36-MW capacity. As per the terms of the PPA, the base tariff is NPR 4.8 per kWh for the wet season2 and NPR 8.4 per kWh for the dry season with an annual escalation of 3% on the base tariff eight times. Thereafter, the escalated rates would be applicable till the life of the project. The PPA indicates a loss of one-time tariff escalation, out of eight times, for every delay of one year starting six months from the RCOD. The contract plant load factor (PLF) of the project is ~67% with an annual production capacity of ~213 GWh of energy.

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