Friday, June 26, 2009

Arun Valley primary issue oversubscribed

Arun Valley Hydropower Company's primary issue has been oversubscribed by over 21 per cent to Rs 2 billion.
"Though, it will take a couple of days to find the actual amount and applicants, by the end of third day -- Thursday -- a total of 43,787 applications worth Rs 1.26 billion have been received," said Niraj Giri, director at the Securities Board of Nepal (Sebon). According to the primary estimation, on the last day -- Friday -- the amount should cross Rs 2 billion.
Arun Valley had floated its 5,15,000-unit primary shares (worth Rs 94.76 million) from June 23 after adding a premium of Rs 84 to the face value of Rs 100, making it Rs 184 per unit share that closed on June 26. According to the regulation, if the primary issue is oversubscribed, the it would be closed on the fourth day.
Similarly, a company can add premium equal to its net worth, if it is in profit and has distributed cash dividend for three consecutive years, according to the new Securities Board of Nepal (Sebon) regulation. Arun Valley has distributed 20 per cent cash dividend from the profits of last fiscal year.
Arun Valley Hydropower -- that constructed Piluwakhola Hydropower in Chainpur of Sankhuwasabha district -- has been providing 20 per cent cash dividend from the profit over three successive fiscal years.
NMB Bank is the sales and issue manager for Arun Valley's primary issue while the issue and sales managers of Chilime's primary issue are NIDC Capital Market and Citizen Investment Trust (CIT).
Arun Valley -- established in 1997 aims to develop, build, own and operate hydropower projects and has formed joint ventures with companies to build medium and large hydropower projects and develop entrepreneurship for the promotion of the hydropower sector's currently-owned Piluwakhola Hydropower Project (3MW).
Currently, there are only three listed hydropower companies -- National Hydropower, Butwal Hydropower and Chilime Hydropower -- at Nepal Stock Exchange. After Arun Valley's listing, there will be four hydropower companies.

Investors' confidence at low
KATHMANDU: Investors are not yet confidence as this week too the transaction amount decreased by 1.76 per cent to Rs 226.91 million. Except the shareholders of hydropower companies, all others including the key market player -- financial institutions like commercial banks, development banks and finance companies sub-groups -- lost this week pulling the Nepse down by 13.10 points to 670.61 points from last week's closing of 683.71 points. The hydropower sub-group gained 14.18 points to close at 897.71 points. Three sub-groups -- manufacturing, others and trading -- didnot see any changes in their indices. NIC Bank (with Rs 27.32 million), Standard Chartered Bank Nepal (with Rs 23.79 million), Nabil Bank (with Rs 12.26 million), Bank of Kathmandu (with Rs 11.00 million) and Nepal SBI Bank (with Rs 10.17 million) are the top performers this week. The contribution of Group A companies went up to 50.86 per cent from last week's 14.38 per cent but the sensitive index --the barometer of Group A companies -- went down by 4.74 points to 178.90 points from last week's closing of 183.64 points.

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