Last Call: Bhujung Hydropower’s IPO Subscription Closes Today

KATHMANDU – Today marks the final deadline for investors to subscribe to the Initial Public Offering (IPO) of Bhujung Hydropower Limited. The company had opened its doors to general public investors on January 26 (Magh 12) after completing the first phase of issuance for local residents and migrant workers.

Out of the company’s total approved issuance of 2 million units (worth NPR 200 million), 1.1 million units were already allotted in the first phase. In this current second phase, 830,000 units are available for the general public, following the reservation of 20,000 units for employees and 50,000 units for mutual funds.

Investment Guidelines Aspiring shareholders must apply for a minimum of 10 units, while the maximum limit is capped at 50,000 units. Applications can be submitted through the Mero Share portal or any C-ASBA certified bank and financial institution before the close of banking hours today.

Project Metrics and Risk Profile The company operates the 7.5 MW Upper Midim Hydropower Project, which has been generating electricity commercially since April 18, 2024 (Baishakh 6, 2081).

• Cost Structure: The project was completed at a total cost of NPR 1.80 billion, resulting in a relatively high per-megawatt cost of NPR 249.08 million.

• Financial Returns: The simple payback period for the investment is estimated at 9.65 years, while the discounted payback period extends to 16.09 years.

• Credit Rating: ICRA Nepal has assigned an 'ICRANP Issuer Rating Single B+' to the company. This rating serves as a cautionary signal, indicating a high risk regarding the company's ability to meet its financial obligations on time.

Kumari Capital Limited is managing the issue and sales for this offering. With the project’s electricity license valid for another 30 years, the IPO represents a long-term play in the renewable energy sector, albeit with a higher risk profile as noted by credit agencies.