Ridi Hydropower prepares to issue IPO shares

The Nepali share market will soon see the entry of another hydropower company as Ridi Hydropower is offering shares to the locals in the run up to the Initial Public Offering (IPO) next week.

Ridi Hydropower Development Company Limited is floating 300,000 units of ordinary shares — at face value of Rs 100 per unit — to the locals of 2.4 MW Ridi Khola Small Hydropower Project affected districts — Palpa and Gulmi — from October 4.

Locals can apply for a minimum of 50 units and a maximum of 5,000 units of ordinary shares but they can only sell the shares after three years of allotment.

The company has set aside 120,000 units for those directly affected by the project residing in five VDCs of Gulmi — Ruru, Dugam, Siddheshwor, Kheha and Argali — and the remaining units have been allocated for the locals of Gulmi and Palpa. The project is promoted by Arun Valley Hydropower among others and has projected 10 per cent appreciation of net worth in the next three years, according to offer letter.

According to the amended Securities Registration and Issuance Regulation – 2065, hydropower companies must float a minimum of 10 per cent of issued capital as shares to locals before they open their issue to the general public. The regulation has fixed a lock-in period of three years for shares distributed to locals.

The hydropower company is expected to issue shares to the rest of the public within the next three months to become the sixth hydropower company to be listed at stock exchange.

There are four hydro companies listed at Nepal Stock Exchange (Nepse) at present — National Hydropower Company, Butwal Power Company, Arun Valley Hydropower Company and Chilime Hydropower Company. The fifth hydro

company to be listed is going to be Sanima Mai Hydropower which concluded its IPO this week. The total market capitalisation of the hydropower subgroup is equivalent to six per cent of the total market capitalisation.
- THT