Market Watch, Stock News

IPO of Arun Valley on 23rd June 2009

Published by Octron on June 10, 2009

June seems to be IPO mania just yesterday we informed you about the forthcoming IPO of Public Development Bank (28th June 2009), after release of Vibor (10th June 2009) & Chilime (15th June 2009). Now, another hydropower is releasing IPO after chilime, and yes this one is bieng released with premium price of Rs. 84 to sum up total price of Rs. 184/share. Finally, Nepali’s who has always been complaining about NO investment oppurtunity in the country seems to be finding a path to invest their money.

Arun Valley Hydropower Development Company has constructed and operating Piluwa Khola Small Hydropower Project at Sankhuwasava District in Koshi Zone. This is a Run of River type project located on the Piluwa Khola, a tributary of Arun River. It has an installed capacity of 3MW and generates 19.55GWh energy per annum. According to power purchase agreement (PPA)with Nepal Electricity Authority (NEA) in 2000, since 18 September 2003, the energy generated from this project has been sold to NEA.

Second project AVH is currently involved (acc. to their website) is Ridi Khola Small Hydropower Project (2.4 MW), which was supposed to have been completed by september 2008, but according to their website its still under construction. Also interesting thing is the project work has been taken under another company name “Ridi Hydropower Development Co. (P.) Ltd”, now is RHDC a subsidary of AVH is a vital question ?
Although both companies have same board members (Board Members: AVH, Board Members: RHD). The construction cost of the project is being arranged from local shareholders and bank loan at 30:70 ratios.

The third project being investigated is the Upper Piluwakhola Small Hydropower Project (4.5 MW) on the Piluwakhola. The company has obtained survey license from the Government of Nepal to develop 4.5MW Upper Piluwa Khola Project on March 2004. The feasibility study work of this project has been completed. The company will build this project by utilizing the infrastructure facilities of the existing Piluwakhola Project (3MW). The project’s powerhouse lies just upstream of the existing Piluwakhola Project (3MW) and the headwork lies at 4.5km upstream of its powerhouse site. The study showed that it is one of the most attractive projects. The project will go Detail Feasibility Study of the project has been completed and the Project has applied for Power Purchase Agreement with Nepal Electricity Authority very soon.

Similarly, other project in the pipeline are;

Lower Phemekhola Small Hydropower Project (2.2MW) – The company has obtained the Survey License from the Government of Nepal on 21, November 2006.
Kabeli-B1 Small Hydropower Project (9.8MW) – The company has applied for Survey License from the Government on February 22, 2005.

Arun Valley Hydropower Development Co. Ltd. is also planning to construct multi-purpose projects that will include any combination of Hydro, Irrigation, Drinking Water, Flood Control, and Fishery etc. In addition the company plans to develop a storage type of project to meet the peak energy demand.

The company is floating 5,15,000 ordinary shares each worth of Rs. 100, but are being sold with Rs. 84 premium price, summing up to Rs. 184/share. The issue manager would be NMB Bank, you can apply for minimum 50 shares and maximum of 50,000 shares per applicant. After this IPO issue, the shareholder division will be 70% promoters (12,00,000), 30% public share holders (5,15,000) totaling 17,15,000 ordinary shares to make paid up capital of Rs.171.5 Million.

According to its published financail statement along with the announcement letter, the company made Rs. 49.93 million profit in fisical year 2062/63, with 1.17 shareholders, its EPS is Rs. 41.03. Similarly, during FY 064/065 its profit fell to Rs. 40.80 and its projected profit after inclusion IPO shareholders for FY 066/067 is Rs. 46.48 million, making EPS Rs. 27.10.

Reference:

Experts Advice: Facts & Figures are clearly laid out. Try checking their official websites (www.arunhydro.com.np, www.ridihydro.com.np ) for more details regarding their project status. If confused read our article – Tips to Apply for an IPO )