NEA to Launch Rs 60 Billion IPO for Public Investment

GP Chudal
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Upcoming IPO of Nepal Electricity Authority

The state-owned power utility, Nepal Electricity Authority (NEA), is prepared to make an initial public offering (IPO) for Rs 60 billion to generate funding from the public. The IPO, one of the largest in the country's history, is part of the NEA's financial restructuring plan and is in accordance with the Nepal Electricity Authority Act, 2041.Suggested: When will NEA IPO Float for General Public?

The NEA has received approval from the Ministry of Finance to issue the IPO and is awaiting approval from the Council of Ministers via the Ministry of Energy, Water Resources, and Irrigation. The board of directors of the NEA, chaired by Energy Minister Shakti Bahadur Basnet, has resolved to keep the authorized capital at Rs 300 billion and to issue the shares to the public at a premium not exceeding 10% of the authorized capital.

The NEA’s IPO is aimed at enhancing the institution’s financial strength, improving its corporate governance, and increasing its public accountability. The NEA also hopes to attract more public participation and investment in the power sector, which is vital for the country’s economic development and energy security.

The NEA has been rated ‘AA+ Plus’ by ICRA Nepal, a credit rating agency, which indicates a high degree of creditworthiness and low default risk. The rating reflects the NEA’s strong financial performance, asset base, risk management, managerial competence, and operational efficiency.

In addition to trading power with China and India, the NEA is Nepal's only supplier of power transmission, distribution, and trading services. A small down from the previous year's net profit of Rs 13.37 billion, the NEA declared a net profit of Rs 12.33 billion for the fiscal year 2079/80.

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