Upcoming IPO: Menchhiyam Hydropower Ltd

Menchhiyam Hydropower Limited invites the public to participate in their journey to a more sustainable future by investing in their Initial Public Offering (IPO). The company, founded as a private limited company in November 2017 and later converted to a public limited company on July 15, 2021, is currently building a 4.72 MW run-of-river Upper Piluwa Khola-II Small Hydropower Project in Nepal’s Sankhuwasabha district.

On August 28, 2015, the company signed a Power Purchase Agreement (PPA) with Nepal Electricity Authority (NEA) to sell 4.72 MW of electricity generated by the project. The wet season tariff (Mid-April to Mid-December) is Rs 4.80 per kWh, and the dry season tariff (Mid-December to Mid-April) is Rs 8.40 per kWh, with a 3% escalation on the base tariff for 5 times. On Shrawan 28, 2079 BS, the company applied to the Securities Board of Nepal (SEBON) for permission to issue the IPO. The company can only float the shares to the public after receiving approval from the regulatory body, SEBON.

If SEBON approves, Menchhiyam Hydropower Limited intends to sell 16,27,750 shares in a public offering worth Rs 16.27 crores. In the first phase, the company will sell shares to residents of project-affected areas before releasing them to the general public in the second phase.
Menchhiyam Hydropower Limited has been assigned an Issuer rating of “CARE-NP BB (Is) [Double B (Issuer Rating)]’ by CARE Ratings Nepal Limited, indicating that the company has a moderate degree of safety in terms of timely servicing of financial obligations in Nepal. NIC Asia Capital Limited has been appointed as the IPO’s issue and sales manager.

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