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Chirkhwa Hydro Power Limited Successfully Allots IPO Shares to Strong Demand, Achieving Oversubscription

The IPO allotment of Chirkhwa Hydro Power Limited has been successfully concluded at the offices of the issue manager, RBB Merchant Banking Limited in Kathmandu.

Chirkhwa Hydro Power Limited had initially issued 8,59,300 unit IPO shares at a par value of Rs 100 for the general public from the 23rd to the 26th of Ashwin, 2080. Previously, the company had allocated 4,00,000 unit shares, equivalent to 10% of the issued capital, to project-affected locals in the Bhojpur District. However, only 2,04,700 units were allotted to valid applicants, leaving 1,95,300 unsubscribed units. These unsubscribed shares have now been combined with the 8,00,000 units (20% of the issued capital reserved for the general public), resulting in a total of 9,95,300 units available for the general public.

Out of the 9,95,300 units, 80,000 units were already issued and allotted to Nepalese citizens working abroad, 40,000 units were designated for mutual funds, and 16,000 units were set aside for company employees. The remaining 8,59,300 units were open for the general public.

The IPO received a remarkable response, with 11,31,936 valid applicants applying for a total of 1,21,36,760 units, oversubscribing the offering by more than 14.12 times. The allotment process involved 85,930 applicants being allocated 10 units each through a lottery system, while the remaining 10,46,006 applicants were not allotted any shares. Additionally, 40,000 units were allotted to mutual funds, and 16,000 units were designated for company employees.

Notably, a total of 2,381 applicants who had applied for 32,700 units were disqualified. The IPO results are available through various channels, including CDSC IPO Result, MeroShare, and RBB Merchant Banking Limited.

Chirkhwa Hydropower Limited, established in January 2009, is actively engaged in the development of a 4.7 MW Upper Chirkhwa Khola Hydropower Project in the Bhojpur district, Province-1 of Nepal. This project is categorized as a run-of-the-river (R-o-R) type and is being developed at a 40% probability of exceedance. The project’s budgeted cost is NPR 910 million, with funding in a 60:40 debt-equity ratio. The debt component of NPR 545 million is secured with Rastriya Banijya Bank Limited. The project has achieved approximately 90-95% progress as of mid-January 2023. Furthermore, ICRA Nepal has reaffirmed Chirkhwa Hydropower Limited’s issuer rating at [ICRANP-IR] BB-, signifying a moderate risk of default regarding the timely servicing of financial obligations.


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