Arun Valley IPO Oversubscribed

Arun Valley Hydropower Company’s primary issue has been oversubscribed by over 21 per cent to Rs 2 billion.

“Though, it will take a couple of days to find the actual amount and applicants, by the end of third day — Thursday — a total of 43,787 applications worth Rs 1.26 billion have been received,” said Niraj Giri, director at the Securities Board of Nepal (Sebon).

According to the primary estimation, on the last day — Friday — the amount should cross Rs 2 billion

Arun Valley had floated its 5,15,000-unit primary shares (worth Rs 94.76 million) from June 23 after adding a premium of Rs 84 to the face value of Rs 100, making it Rs 184 per unit share that closed on June 26. According to the regulation, if the primary issue is oversubscribed, the it would be closed on the fourth day

Similarly, a company can add premium equal to its net worth, if it is in profit and has distributed cash dividend for three consecutive years, according to the new Securities Board of Nepal (Sebon) regulation

Arun Valley has distributed cash dividend for the last successive three years and it has distributed 20 per cent cash dividend last fiscal year. Arun Valley Hydropower — that constructed Piluwakhola Hydropower in Chainpur of Sankhuwasabha district — has been providing 20 per cent cash dividend from the profit over three successive fiscal years.

NMB Bank is the sales and issue manager for Arun Valley’s primary issue while the issue and sales managers of Chilime’s primary issue are NIDC Capital Market and Citizen Investment Trust (CIT)

Arun Valley — established in 1997 aims to develop, build, own and operate hydropower projects and has formed joint ventures with companies to build medium and large hydropower projects and develop entrepreneurship for the promotion of the hydropower sector’s currently-owned Piluwakhola Hydro Project (3MW).

Currently, there are only three listed hydropower companies — National Hydropower, Butwal Hydropower and Chilime Hydropower — at Nepal Stock Exchange (Nepse). After Arun Valley’s listing, there will be four hydropower companies.