Hathway Investment Nepal Limited has
launched its initial public offering (IPO) for the general public from
Thursday.
The company had received permission to issue 2.925 million units of shares at a face value of Rs 50 per share worth Rs 146.25 million i.e. 12.50 per cent of the total issued capital of Rs 1.17 billion.
In
the first phase, the company has issued 292,500 units of shares worth Rs 14.62
million to Nepalis in foreign employment. Similarly, the company has issued
58,500 units of shares worth Rs 2,925,000 to its employees and 1,46,250 units
worth Rs 7,312,500 to mutual funds. In the second phase, the company has issued
2,427,750 units of ordinary shares worth Rs 121,387,500 to the general public.
At present, the paid-up capital of the
company stands at Rs 1.02 billion. After issuing the IPO to the general public,
the paid-up capital of the company will reach Rs 1.17 billion.
How to apply for an IPO?
Applications can be made for the IPO issued
by the company till September 15. If there are not enough applications as per
the demand by that period, the issue period will be extended till September 15.
Interested investors will have to apply for a minimum of 20 units at the rate
of Rs 50 per share and a maximum of 100,000 units in the number divided by 20
points for more than that.
Applications for the IPO of the company can
be submitted from all C ASBA member banks and financial institutions and their
designated branch offices approved by the Securities Board of Nepal. Similarly,
applications can also be made through the 'My Share' mobile app being operated
by CDSC.
Global IME Capital Limited is the issue
manager of the company.
Rating of moderate risk
ICRA Nepal Limited, a credit rating
company, has awarded the company an ICRANP issuer rating triple B minus in the
rating for the IPO issue. This indicates that the company is moderately secure
to meet its financial obligations on time.
ICRA Nepal had awarded the credit rating
grade to insurance on April 1, 2019. The duration of this rating will be one
year i.e. till April 1, 2019.
What kind of company is it?
Hathway Investment Nepal Limited has been
operating its business since March 15, 2009, registered with the Office of the
Registrar of Companies, Government of Nepal, as per the Companies Act, 2063 BS.
The registered office of the company is located at Kathmandu Metropolitan
City-26, Hathway Complex, Lainchaur, Kathmandu.
Established and operated by a group of eminent
young entrepreneurs, entrepreneurs, chartered accountants, other professionals
and other eminent personalities of Nepal, the company has been successful in
establishing itself as a successful company by investing in nepal's capital
market and other areas of investment. In addition to the capital market, the
company has been contributing to the economic development of the country by
expanding and diversifying its investments in hydropower, real estate,
economic, tourism and self-capital sectors.
Purpose of ISSUING IPO
The main purpose of issuing the IPO of the
company is to issue a public issue as provided in the company's management
letter and also to make representation on behalf of the general public on the
board of directors.
Similarly, there are other objectives of
issuing an IPO to raise the required capital for the tasks to be carried out in
accordance with the objectives mentioned in the company's management letter and
regulations, to expand its investment by making the maximum use of the capital
collected through public issue and to provide the capital required to increase
the capacity of the business.
According to the company, the capital
received through public issue will be used for the business purpose of the
company subject to the Companies Act and other prevailing laws. In this way,
the public issue is planned to invest and establish the proceeds from the
public issue in various manufacturing and service companies and other companies
in accordance with the company's main objective, and accordingly the company
will invest in companies operating various hydropower generation, transmission
and distribution projects and other production and service companies.
The company will invest Rs 60 million in
hydropower generation, transmission and distribution companies, while the
remaining Rs 86.25 million will be invested in the founder's shares of
organized organizations related to economic infrastructure, transport and
communications.
Accumulated profit of Rs 300 million in the
last financial year
The company has projected a consolidated
profit of Rs 306.21 million in the last fiscal year. The company had posted a
consolidated profit of Rs 278.4million in the last fiscal year.
Similarly, the company has projected a
consolidated profit of Rs 441.38 million in the current fiscal year and Rs
619.4 million in the next fiscal year i.e. fiscal year 2081/82.
The company's earnings per share is
expected to reach Rs 1.31 by the end of the current fiscal year from 17 paise
in mid-March last fiscal year. Similarly, the company's earnings per share in
the current fiscal year is estimated to be Rs 5.78 per share and rs 7.25 in the
next fiscal year.
By the end of the current fiscal year, the
company's net worth per share is expected to be Rs 88.17. The net worth of the
company stood at Rs 80.63 per share at the end of Mid-March of the last fiscal
year. The company's net worth per share is expected to be Rs 99.71 per share in
the next financial year.
What is the capital structure?
The authorized capital of the company is Rs
1.5 billion. The capital has been divided into 30 million units of shares at
the rate of Rs 50 each.
The issued capital of the company stands at
Rs 1.17 billion. The capital has been divided into 23.4 million units of shares
at the rate of Rs 50 each.
Of its issued capital, Rs 1.02 billion has
already been repaid by the founder shareholders. The remaining Rs 146.25
million will be issued to the general public through the issue of public
shares. The paid-up capital of the company will be Rs 1.17 billion after
issuing and allotting 2.925 million units of ordinary shares at a face value of
Rs 50 per unit worth Rs 146.25 million set aside for Nepalis working abroad
after obtaining labour permit from the Employees and Collective Investment Fund
and the concerned agencies of the Government of Nepal.
After the IPO issue, the company's share
structure will be 87.50 percent of the founder group and 12.50 percent of the
general public.
Who is on the board of directors?
There are seven members on the board of directors
of the company. There will be four members from the founding shareholders, two
from the general shareholders and one independent director.
Yogeshwar Sharma Dhakal is the chairman of
the board of directors of the company. Suraj Kumar Shrestha, Kumar Poudel and
Jairam Nepal are members of the board of directors.
There is a provision to have representation
in the board of directors accordingly after the issue and allotment of shares
among the general public.
Company opening range in secondary
market
The opening
range of the company depends upon the audited book value of the company.
Similarly, the opening range is calculated by multiplying the audited book
value by 3.
So, the book
value of the company is Rs. 95.09. Hence, the opening range of the company will
be Rs. 95.09 to Rs. 285.27.
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