NEA gets green light from Finance Ministry to issue Rs 60 Billion IPO

GP Chudal
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Nepal Electricity Authority to issue Rs 60 Billion IPO

The Nepal Electricity Authority (NEA), the state-owned power utility, has received the approval from the Finance Ministry to issue its initial public offering (IPO) worth Rs 60 billions to the general public. The proposal, which was initiated by the NEA’s Executive Director Kulman Ghising, will now be forwarded to the Cabinet for the final endorsement.

The NEA plans to issue 10% of its authorized capital of Rs 60 billions as public shares, with a premium price of Rs 125 per share. This means that the investors will have to pay Rs 250 for each share they want to buy. The NEA expects to raise Rs 30 arba from the IPO, which will be the largest ever in Nepal’s history.

Suggested: When will NEA IPO Float for General Public? 

The NEA has a paid-up capital of Rs 175 arba and a reserve fund of Rs 27 arba, resulting in a net worth of Rs 202 arba as of the fiscal year 2078/79. The NEA has also obtained a credit rating of AA+ from ICRA Nepal, indicating a high degree of safety and low credit risk for the investors.

The NEA aims to use the funds raised from the IPO to invest in various hydropower projects, transmission lines, distribution networks, and smart metering systems. The NEA also hopes to enhance its institutional development, corporate governance, and public accountability by issuing the IPO.

The NEA has been making profits for the last five years, after ending the chronic load-shedding problem in the country. The NEA earned a net profit of Rs 12.33 arba in the fiscal year 2077/78, despite the challenges posed by the COVID-19 pandemic and the political instability. The NEA has also increased its electricity generation, transmission, and distribution capacity, as well as its customer base and electrification rate.

The NEA has also announced to hold its 25th annual general meeting (AGM) on Falgun 29, 2080. The AGM will approve the proposed IPO, appoint statutory auditor, amend the memorandum of association and articles of association, and elect five directors from the promoter group and one director from the public group.

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