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Nepal, Ridi Hydro: Common Equity—Uncommon Enthusiasm

Valuing A Public Offer of Equity Shares
  • Srinivasan Sunderasan
Chapter

Abstract

Companies seeking to tap into the capital markets by issuing common equity shares to the public in Nepal were mandated by law to issue such shares at face value, typically of Nepalese rupee (NPR) 100. Such pre-money valuation ignored the windfall gains likely on listing, for, when trading in the shares commenced, they were typically priced at a substantial premium over the issue price based on post-money valuation. Hydropower stocks in Nepal offered a welcome diversification for investors in a market dominated by banking and finance companies. Marginal costs of hydrokinetic generation were negligible: the income streams were considered stable and reasonably predictable. For most part, the product (electricity) was without substitute, and the market almost unlimited, both at home in Nepal, as well as for export to neighbors viz., India and Bangladesh.

Keywords

Cash Flow Initial Public Offering Free Cash Flow Arbitrage Opportunity Hydropower Project 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Ghimire S (2014) Ridi hydropower’s IPO oversubscribed by 92 times, Republica 23 Feb 2014. http://myrepublica.com/portal/index.php?action=news_details&news_id=70044. Accessed 3 Apr 2014
  2. ICRA (2014) ICRA Nepal assigns IPO grade 3 to the proposed IPO issue of Ridi Hydropower Development Company Limited ICRA Nepal, Dec 2013. http://www.icranepal.com/RecentReleases/Ridi%20Hydropower%20Rationale%20Final.pdf. Accessed 3 Apr 2014
  3. NMB Capital Limited (2014) The analyst: initial public offering | NEPSE 804, 17 Feb 2014. http://www.nmbcapital.com.np/uploads/NMBCL_Ridi_IPO_20140217.pdf. Accessed 3 Apr 2014
  4. ShareSansar (2014) Ridi hydropower Issues IPO of 11.70 Lakh Units from Today, ShareSansar, 16 Feb 2014. http://sharesansar.com/viewnews.php?id=18937&cat=news. Accessed 3 Apr 2014

Copyright information

© Springer India 2015

Authors and Affiliations

  1. 1.Verdurous Solutions Private LimitedMysoreIndia

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