Api
Power Company Limited floated 10 percent of its issued capital to the local
residents of Darchula and Baitadi districts, a mandatory requirement by
Government of Nepal. These two districts are located in far western region of
Nepal. Api Power Company Limited offered one million shares at Rs 100 each.
To
know more about the company and its project please check The next upcoming IPO: Api Power Company Limited.
Districts
|
Area
|
Population
|
Density
|
Darchula
|
2,322 sq. km.
|
133,464
|
57 per sq. km.
|
Baitadi
|
1,519 sq. km
|
250,898
|
170 per sq. km.
|
Baitadi
and Darchula are among the least developed districts in Nepal. Subsistence
farming, lack of basic infrastructure, low income level and low literacy rate
are the common characteristics of these districts.
The
concept of saving and investment especially in shares is something new in this
area. However, the response shown by the local people in Api Power Company’s
share was quite outstanding. It was something hard to imagine. Out of one
million shares offered to the local residents, it was oversubscribed by almost
2.5 times. That means, Api Power collected almost Rs. 250 million. Huge number
of residents from Darchula and Baitadi districts stayed in the queue for hours in
order to apply.
As
a part of local participation in the project, Government of Nepal asks developers
to allocate 10 percent of its total issued capital for the project affected
people. These local shares will have a lock-in period of three years from the
date of allotment. After the lock-in period, these shares can be traded easily
in Nepal stock exchange.
The
collection of Rs. 250 million in Darchula and Baitadi districts shows the craze
in hydropower share. Nobody has expected to collect this much amount from the region that is one of the poorest in Nepal. The main reason behind this success is
because of the expectation. Normally, hydropower shares go up once they are
listed. So purchasing hydro shares at a par value will guarantee a handsome
return.
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