Solu Hydropower Limited IPO has become one of the most discussed public issues in Nepal. Investors are closely watching this hydropower IPO due to its scale and timing. The issue arrives when energy demand and investor participation are rising steadily. Therefore, market interest in Solu Hydropower Limited IPO continues to grow.
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This IPO allows the public to invest in a large renewable energy project. Hydropower remains a core pillar of Nepal’s energy development strategy. Moreover, long term power demand strengthens the sector’s outlook. As a result, this public issue attracts both new and experienced investors.
Company Background of Solu Hydropower Limited
Solu Hydropower Limited was incorporated in June 2010 as a private company. Later, the company converted into a public limited entity in July 2022. This transition improved corporate governance and regulatory compliance. It also prepared the company for public ownership.
Initially, Essel Infraprojects Limited of India held majority ownership. Eventually, ownership moved entirely to Nepalese shareholders. This development strengthened domestic control and national confidence. Consequently, the company aligned more closely with Nepal’s energy goals.
The company is now promoted by several major business groups. These include Triveni, Vishal, Goyal, Rathi, Baidya, and Jain groups. Their involvement provides financial strength and solid business experience. Therefore, the promoter structure maintains long term corporate stability.
As of February mid 2024, company shareholding stays diversified. Govind Lal Sanghai controls 8.16 percent equity shares. Nitesh Agrawal and Ram Chandra Sanghai also possess notable share stakes. Such diversification reduces governance risks.
Solu Hydropower Limited IPO Issue Details
Solu Hydropower Limited IPO opens for the general public on 29th Poush 2082. The company is issuing 82 lakh unit shares at Rs. 100 per share. This pricing reflects the par value without any premium. Therefore, entry remains affordable for retail investors.
The early closing date for the IPO is 4th Magh 2082. However, the issue will extend until 14th Magh if undersubscribed. This extension ensures sufficient investor participation. It also increases the chance of full subscription.
The issued capital of the company stands at Rs. 10 Arba. Out of this amount, 20 percent is allocated for public issuance. Previously, 10 percent was issued to project affected locals. This approach promotes regional economic inclusion.
Additionally, 10 percent of public shares were reserved for Nepalis working abroad. This allocation strengthens diaspora investment participation. It also encourages foreign income inflow into Nepal’s capital market. Hence, the IPO structure remains inclusive.
Share Allocation Structure of Solu Hydropower Limited IPO
The general public will receive 82,00,000 unit shares. These shares become available from the opening date. Retail investors form the largest group in this allocation. Therefore, public participation remains strong.
Employees of the company receive 3 percent of the offered shares. This equals 3,00,000 unit shares in total. Ownership by employees increases incentive and accountability. It also aligns workforce interests with company growth.
Mutual funds receive 5 percent of the total offered shares. This equals 5,00,000 unit shares. Institutional participation supports price stability after listing. Moreover, it reflects professional investor confidence.
The minimum application quantity is set at 10 units. The maximum application limit is 1,00,000 units. This wide range supports both small and large investors. As a result, accessibility remains high.
Lower Solu Hydroelectric Project Details
Solu Hydropower Limited operates the 82 MW Lower Solu Hydroelectric Project. The project is located in Solukhumbu district of Nepal. This region has strong hydrological conditions. Therefore, power generation remains reliable.
The project covers a catchment area of 411 square kilometers. It has a design discharge of 19.85 cubic meters per second. This figure applies at 40 percent probability of exceedance. Hence, energy projections remain realistic.
The project has a gross head of 493 meters. This height supports efficient turbine performance. Higher head improves electricity output significantly. As a result, operational efficiency remains strong.
The project contributes to Nepal’s national power supply. It promotes the objectives of clean electricity and energy security. Additionally, it reduces dependency on power imports. Thus, the project holds strategic importance.
Credit Rating of Solu Hydropower Limited IPO
Infomerics Credit Rating Nepal Limited assigned an IRN BB rating. This issuer rating reflects moderate default risk. It relates to timely servicing of financial obligations. Therefore, investors should evaluate risk carefully.
A Double B rating indicates stable but cautious credit strength. The company can meet obligations under normal conditions. However, unfavorable situations may affect performance. Hence, risk awareness remains essential.
Hydropower projects carry hydrology and operational risks. Seasonal river flow variations can affect revenue consistency. Nevertheless, long term electricity demand supports stability. Therefore, risk remains manageable.
Investors should balance growth potential with credit risk. Nepal’s energy sector shows strong long term demand. Moreover, government support strengthens the sector. Thus, informed analysis remains key.
IPO Issue Manager and Application Process
Nabil Investment Banking Limited acts as issue manager for the present IPO. The firm shows strong experience in handling public investment issues. Its involvement enhances transparency and credibility. Therefore, investor confidence improves.
Applicants can submit through C ASBA approved banking institutions. Online and physical branch application options remain fully available. The process remains simple and regulated. Hence, participation becomes convenient.
Allotment will follow standard regulatory guidelines. Oversubscription may result in proportionate allotment. Retail investors should plan applications accordingly. Thus, realistic expectations remain important.
Applicants must follow official timelines strictly. Late or incorrect submissions face rejection. Processing is made easier with proper documentation. Therefore, careful application is essential.
Frequently Asked Questions About Solu Hydropower Limited IPO
When does Solu Hydropower Limited IPO open?
The IPO opens on 29th Poush 2082 for general investors. It may close early on 4th Magh 2082. If undersubscribed, it extends until 14th Magh 2082. Dates follow the official issue schedule.
What is the issue price of Solu Hydropower Limited IPO?
The issue price is Rs. 100 per unit share. This price represents the par value. No premium is charged in this IPO. Therefore, pricing remains simple.
How many shares are issued to the public?
A total of 82,00,000 unit shares are issued to the general public. Additional shares were allocated earlier to specific groups. Public allocation remains significant. Hence, retail participation stays high.
What is the credit rating of Solu Hydropower Limited?
The company holds an IRN BB issuer rating. This rating indicates moderate credit risk. Investors should consider risk tolerance before applying. The rating is provided by Infomerics Nepal.
Conclusion on Solu Hydropower Limited IPO
Solu Hydropower Limited IPO presents an opportunity to invest in Nepal’s hydropower sector. The IPO supports renewable energy growth and national infrastructure development. Moreover, the Lower Solu project adds long term generation capacity. Therefore, the issue holds strategic relevance.
The IPO offers clear allocation, affordable pricing, and experienced issue management. Simultaneously, moderate credit risk needs careful investor evaluation always here. Investors should match decisions with financial objectives. Overall, Solu Hydropower Limited IPO appears as a notable hydropower issue in Nepal’s capital market.
