Mount Everest Power Development IPO: Last Day for General Public Application

Today, Ashar 8 (June 22, 2024), marks the final opportunity for the general public to apply for the Initial Public Offering (IPO) of Mount Everest Power Development Limited. This crucial deadline follows the successful allocation of shares to project-affected local residents and Nepalis in foreign employment, signaling the conclusion of the company's public issuance.

Mount Everest Power Development Limited had previously secured approval to issue 2,580,000 ordinary shares, constituting 30% of its NPR 860 million issued capital, amounting to a total of NPR 258 million. The issuance was strategically phased to ensure broad and inclusive participation. In the initial phase, 860,000 shares were successfully distributed to residents within the areas impacted by the Dudhkunda Khola Hydropower Project, underscoring the company's commitment to local community engagement. Concurrently, 172,000 shares were allocated to Nepalis residing abroad, offering them a direct pathway to invest in their home country's burgeoning energy sector. Additionally, the company reserved and allotted 34,400 shares for its dedicated employees and 86,000 shares for various collective investment schemes (mutual funds), fostering a diversified ownership base.

The current offering, which culminates today, represents the second and final phase, specifically targeting general investors. A total of 1,427,600 ordinary shares are available for subscription at a par value of NPR 100 per share, totaling NPR 142.76 million. Investors are required to apply for a minimum of 10 shares, with a maximum application ceiling of 10,000 shares. This structured approach aims to facilitate equitable participation across a broad spectrum of retail investors.

Regarding the company's financial standing and risk profile, CARE Ratings Nepal has assigned Mount Everest Power Development Limited a 'CARENP Double B Plus Issuer' rating for its IPO. This rating indicates a moderate level of risk concerning the company's capacity to fulfill its financial obligations. While not the highest possible rating, it provides prospective investors with a transparent assessment of the company's creditworthiness and operational stability, aligning with standard practices for public offerings in the Nepalese market.

Mount Everest Power Development Limited is the operator of the 12 MW Dudhkunda Khola Hydropower Project. The total estimated cost for the development and operation of this project is approximately NPR 2.369 billion (NPR 2,369,320,042), which translates to a per-megawatt cost of around NPR 197.44 million (NPR 197,443,336.83). The project benefits from a substantial remaining electricity generation license period of 28 years and 9 months, ensuring long-term operational continuity and robust revenue generation potential. From an investment perspective, the project demonstrates an attractive simple payback period of 6.40 years and a discounted payback period of 8.94 years. These figures suggest a relatively favorable return on investment, particularly for a hydropower venture that typically entails significant upfront capital expenditure and extended gestation periods.

NIMB Ace Capital Limited is serving as the official issue manager and sales manager for this IPO. Prospective investors have multiple convenient channels for submitting their applications. They can utilize the C-ASBA system through banks and financial institutions authorized by the Nepal Securities Board, including their designated branch offices. Furthermore, for enhanced accessibility and convenience, applications can also be submitted online via the Mero Share software, a service provided by CDSC (Clearing and Depository Company Limited).

The Nepalese hydropower sector continues to be a focal point of investor interest, driven by the nation's immense hydroelectric potential and the government's strategic emphasis on sustainable energy development. IPOs from hydropower companies frequently experience oversubscription, reflecting strong public confidence in the sector's long-term growth trajectory and its pivotal role in Nepal's economic progress. As Mount Everest Power Development Limited concludes its IPO, it represents another significant stride in expanding Nepal's energy infrastructure and offers a valuable new investment opportunity for the public. Investors are strongly advised to complete their applications promptly to capitalize on this limited-time offering.