Butwal Power Company Limited has prepared for issuance of its Further Public Offering (FPO). It has already got approval from Securities Board of Nepal (SEBON).
Butwal Power Company Limited is issuing FOP of 4,081,000 unit of equity shares. The face value of the share is Rs 100. But the company is offering its share with additional Rs 401 as premium which cost Rs 501 per unit of share.
Butwal Power Company Limited has been rated with grade 3 by ICRA Nepal (ICRANP) indicating average fundamentals. There is also an investment of government in this company.
NMB Capital Limited has been appointed as issue manager for the FPO.
The assigned grading factors in strong parentage, diversified business profile and long track record of operations of BPCL, which operates two hydroelectric projects (HEPs) with aggregate capacity of 21.4 MW in Nepal, owns and operates a distribution network (in 64 villages across 4 districts in western Nepal) and also has investments in other hydro power related businesses. Although the distribution business of BPCL is loss making on account of low approved tariff, earnings from operating projects coupled with dividend from investee company (Himal Power Limited, HPL) have resulted in stable earnings stream for the company. Consequently, there has been a sustained reduction in debt levels in the last four years, despite upgradation capex undertaken by the company; resulting in comfortable capital structure and increased financial flexibility.
ICRA Nepal assigns IPO grading on a scale of IPO Grade 1 through IPO Grade 5. Grade 1 indicating strong fundamentals. Grade 5 indicating poor fundamentals. For the grading categories 2, 3 and 4, the sign of + (plus) appended to the grading symbols indicate their relative better position within the grading categories concerned.
Butwal Power Company has posted net profit of Rs 7.22 crore in the first quarter of FY 2074/75.