Upper Tamakoshi hydropower proj gets ready for Rs 518-cr IPO

The Upper Tamakoshi Hydropower Project is preparing to hit the capital market with a initial public offering (IPO) worth Rs 518 crore, one of the largest public issues so far in the country. The company has authorised Citizen Investment Trust (CIT) to manage the tasks relating to the share issue. Bigyan Shrestha, acting project chief of Upper Tamakoshi, and Rishi Ram Gautam, executive director of CIT, today signed an agreement to this effect in a function here. The paid-up capital of the 456 MW project stands at Rs 1,059 crore, of which 49 per cent would be held by ordinary shareholders. The IPO will be issued in two phases, according to officials. In the first phase, the shares will be issued for primary beneficiary (the local people of Dolakha where project is located), members of the Employees' Provident Fund (EPF), its employees, employees of CIT, Nepal Electricity Authority (NEA), Nepal Telecom, Rastriya Beema Sansthan and employees of Upper Tamakoshi Project itself. They have been allocated 34 per cent shares in the project. The project plans to issue ordinary shares for the general public in the second phase. The general public will have a 15 per cent stake in the company. According to a press release issued by the project, the IPO for the primary beneficiary will be worth Rs 360 crore in the current fiscal year. "IPO worth Rs 158 crore would be issued for other ordinary shareholders in the second phase," said Rishiram Gautam, executive director at CIT. The company said it has already received Rs 510 crore from institutional shareholders, including NEA, Nepal Telecom, Rastriya Beema Sansthan and CIT. The institutional shareholders have pledged a combined Rs 540 crore. Remaining Rs 30 crore will be made available before the IPO, said a press release. The majority share (51 per cent) of the company will be held by four public entities � Nepal Electricity Authority (NEA), Nepal Telecom (NT), Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS). NEA and other local lenders have pledged a combined Rs 2200 crore, while the Nepal government will provide Rs 1,108 crore for the project whose estimated cost is at Rs 3,529 crore. The project is expected to be completed by the end of fiscal year 2014-15. As of the first half of the current fiscal year, 40 per cent work on the project construction has been completed.