Locals IPO of Balephi Hydropower Limited Opens Today, Here’s What You Should Know About the Company

Company Profile:

Incorporated on February 15, 2012, as a private limited company, Balephi Hydropower Limited (BHL) was converted into a public limited company on January 6, 2017, to facilitate public participation. BHL is developing a 36-MW Upper Balephi A hydroelectric project in Sindhupalchowk district of Province 3 of Nepal, which is around 95-98% complete as of November[1]end 2021. This run of the river (R-o-R) project is being developed at a 41.60% probability of exceedance (Q41.60). The project has been estimated to be developed at a revised budgeted cost of NPR 7,856 million (~NPR 218 million per MW) at a debt-equity ratio of 74:26. BHL has a paid-up capital of ~NPR 1,462 million, as of mid-July 2021, which is 100% held by the promoters. The major promoters of the company 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%). Out of the total equity requirement, the promoters have already injected their 100% capital commitment and the rest 20% of the equity, which is yet to be issued an Initial Public Offering (IPO), has been funded through a bridge gap loan against the proposed IPO

About the Issue:

Balephi Hydropower Limited is issuing 1,827,970 units of ordinary shares worth Rs. 18.27 crores to the project affected locals from Magh 27, 2078. The early closing date of this IPO issue is on Falgun 12, 2078. If this issue is not fully subscribed till Falgun 11, 2078 then the issue will be extended up to Falgun 27, 2078.

Applications can be placed for a minimum of 10 units to a maximum of 100,000 units.

Global IME Capital Limited has been appointed as the issue manager.

Total Capital100%18,279,7001,827,970,000
Total Issue20%3,655,940365,594,000
Project-Affected Locals10%1,827,970182,797,000
General Public10%1,827,970182,797,000
Issue ManagerGlobal IME Capital Limited  
Issue Open DateMagh 27, 2078  
Issue Closing Date (Earliest)Falgun 12, 2078  
Issue Closing Date (Late)Falgun 27, 2078  
Minimum Application10  
Maximum Application100,000  

ICRA Rating:

ICRA Rating Nepal has assigned [ICRANP-IR] IPO BB to the proposed Initial Public Offering (IPO) of Balephi Hydropower Limited indicating a moderate risk of default regarding timely servicing of financial obligations.

Key Grading Weakness:

  • Lower Project Execution risk
  • Lower evacuation risk
  • Experienced promoters and management
  • Low tariff and offtake risks with the presence of long-term PPA at predetermined tariffs and escalations

Key Grading Strengths:

  • High project commissioning cost
  • Funding gap amid the escalated project cost
  • Failure to get extended RCOD could result in tariff escalation loss and late COD penalty
  • High hydrology risks, given lack of deemed generation clause in PPA

Board Members:

Board of Directors
Mr. Umesh KasajuChairman
Mr. Sushil GuptaDirector
Mr. Sulav AgrawalDirector
Mr. Sandeep ShardaDirector
Mr. Shakti Kumar GolyanDirector

Capital Structure:

Authorized Capital2,400,000,000
Issued Capital1,827,970,000
Current Paid-Up Capital1,462,376,000
Capital afer IPO Issuance1,827,970,000

Shareholding Pattern:

Public (Project Affected)10%1,827,970182,797,000To be issued
Public10%1,827,970182,797,000To be issued

Project Information:

Name of ProjectUpper Balephi A
Type of ProjectRun-of-River
Installed Capacity36 MW
Expected Energy Generation11/17/2078
Total Cost (Inc. Interest)7,655,949.48

Use of Funds collected from IPO

S. NParticularsAmount
1Payment of Bridge Gap Loan360,000,000
2Payment of Interest On Loans5,594,000

Financial Highlights:

Total Paid-Up Capital (‘000)1,182,110.001,462,376.001,462,376.001,462,376.001,827,970.001,827,970.001,827,970.00
Reserve & Surplus (‘000)65,385.00-88,959.00-93,034.00-94,018.00-279,988.00-18,378.0031,830.00
Debt (‘000)575,426.00837,272.001,349,596.005,980,660.005,876,218.005,702,758.005,313,658.00
Revenue from sale of Electricity (‘000)102.390.000.000.00318,519.691,177,217.641,211,565.96
Net Profit (‘0000-76,941.00-83,215.43-88,958.53-94,017.64-279,988.08-18,377.6931,830.25
Earnings per share (Rs.)-6.51-5.69-6.08-6.43-15.32-1.011.74
Net worth per share (Rs.)105.5393.9293.6493.5784.6898.99101.74
Debt-Equity (times)0.460.610.994.373.803.152.86
Return on Equity (%)-6.17%-6.06%-6.50%-6.87%-18.09%-1.02%1.71%