Sebon approves Chilime’s IPO

KATHMANDU:Securities Board of Nepal (Sebon) has approved the much-awaited Chilime Hydropower Company’s primary issue of 23,04,000 units. The board permitted Chilime to add a premium of Rs 223.70 to the face value of Rs 100 per unit, making it a total of Rs 323.70 per unit share equal to its networth.

Today its per unit share was traded at Rs 1,125 per unit at the Nepal Stock Exchange Ltd (Nepse) — the sole secondary market.

According to the new regulation, a company can issue primary shares adding premium if it has recorded profit and distributed bonus for three consecutive years. Chilime last week distributed 35 per cent cash dividends to its shareholders from last year’s profits.

The model hydropower company, after repeated pressure from Sebon, finally agreed to float its primary shares to the public, though it had sold shares to Nepal Electricity Authority (NEA) staff and started trading in the secondary market according to the then regulation.

Chilime Hydropower — constructed with domestic technology — has been long planning to raise Rs 240 million through an equity offering. The Chilime model is an example of how Nepalis can themselves construct hydro power plants by raising money from the domestic market, if the government has a clear vision of utilising the capital market for development purpose.

Chilime Hydropower is the first hydropower company to be listed for share trading at Nepse. The much-vaunted Chilime model will be replicated in the Tamakoshi Hydropower soon.

Currently, there are only three listed hydropower companies — National Hydropower, Butwal Hydropower and Chilime Hydropower — in the secondary market.

The issue and sales manager of Chilime’s primary issue are NIDC Capital Market Ltd and Citizen Investment Trust.

Sebon — the regulator of the capital market approved the primary issue on the basis of the Due Diligence Certificate that the company provided before the board.