Kathmandu, Feb 24
The Initial Public Offering (IPO) of Ridi Hydropower Development Company has been oversubscribed by 92 times.
Bhisma Raj Chalise, CEO of Civil Capital Market - the issue manager for the IPO, said they have received around 90,000 applications for 1.17 million units of primary shares with face value of Rs 100. "We have collected approximately Rs 11 billion from the applicants," added Chalise.
Crowd had thronged six collection centers in Kathmandu on all four days beginning February 16. The application was closed on Thursday after the IPO was oversubscribed. Some investors had even
complained that they could not get application forms from the issue manager.
complained that they could not get application forms from the issue manager.
Chalise, however, termed such reports baseless. "We spared no effort to ensure that people apply for shares in a hassle-free manner," he added.
Ridi Hydropower is the sixth hydropower company to go public. So far, Arun Valley Hydropower Development Company, Butwal Power Company, Chilime Hydro Power Company, National Hydro Power Company, and Sanima Mai Hydropower have issues primary shares. Similarly, Upper Tamakoshi Hydro Power (UTHP) has sought permission from the Securities Board of Nepal (Sebon) to float 25.42 million units of shares to public, while Barun Hydropower Company has applied for permission to issue 243,000 units of shares to the people in the project affected area.
Analysts attribute the growing interest of investors toward IPOs to the rising stock prices in the secondary market. "People are interested toward IPOs as they expect the price of primary shares bought at Rs 100 each would go significantly once they are listed in the second market," Narendra Sijapati, president of Stock Brokers Association of Nepal (SBAN), told Republica.
Chalise echoed Sijapati and underlined the need to introduce OpenIPO to allocate primary shares in a more systematic manner.
ICRA Nepal, a credit rating agency, has assigned an "[ICRANP] IPO Grade 3", to the IPO of Ridi Hydropower. ICRA Nepal assigns IPO grading on a scale of Grade 1 through Grade 5, with Grade 1 indicating strong fundamentals and Grade 5 indicating poor fundamentals.
Source: Republica
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