According to initial data of Citizens Investment Trust - the issue manager, around Rs 35 billion has been raised from subscribers."The Rs 2-billion IPO has drawn a very good response. We have received around 210,000 applications worth around Rs 35 billion for primary shares of the HIDCL," Sushil Kumar Aryal, chief manager and spokesperson of HIDCL, told Republica. "The figure is based on our initial calculation. We can ascertain the number of applications and the ratio of institutional and individual investors only after few days," added Aryal.
The IPO, which was launched on October 29 for seven days, was oversubscribed on the opening day itself, according to the issue manager.
The state-owned hydropower investment company, which has already allotted one million units of shares to six mutual funds, floated 18.6 million units of primary shares to general public.
Established as a public investment company on July 6, 2011, 80 percent of the company's shares are held by the government (50 percent) and three state-owned companies (30 percent). General public will have 20 percent stake in the hydropower investment company following the allotment of primary shares.
The government established HIDCL, realizing the need of a special agency with huge financial might, professional expertise, and single-point agenda that could implement its hydropower development programs.
The company has already started making investments in eight hydropower projects including Lower Solu and Dordi Khola hydropower projects. It plans to utilize the money generated from the IPO in business expansion.
ICRA Nepal had assigned '[ICRANP] IPO Grade 3' rating to the shares of the HIDCL, indicating average fundamentals. ICRA Nepal has attributed a number of constraints to the grading it assigned to the IPO of the company.
Investment attraction toward IPO is growing in recent years as thousands of public throng collection centers to subscribe public offering of various companies. Analysts attribute the face value of Rs 100 per unit for shares, which they can sell at higher prices in the secondary market, lack of good investment alternatives, falling interest rates in bank deposits, and growing awareness about the capital market to the rise in attraction of public toward IPOs.
"Since there are no better avenues for investors and the public to make investment, IPO has become a safe bet for them. Deposit interest rate of banks is in the downward trend and the secondary market was recently at an all-time-high. This has lured investors toward buying primary shares," Shreejesh Ghimire, CEO of NMB Capital - a co-issue manager of the IPO - said.
According to Securities Board of Nepal (Sebon), a total of 28 companies acquired permission from the capital market regulator to float their primary shares or debentures worth of Rs 6.66 billion in the last fiscal year, up from Rs 3.02 billion in 2013/14.
Related story
Pure Energy's IPO oversubscribed by 16 times
-1769564710.webp)
