Preparation of the authority to issue an IPO at a price of Rs.
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Nepal Electricity Authority has got 'Double A (AA) Plus' rating this year as well. Ikra Nepal Limited has given the rating of 'Ikra NP Double A Plus' level by rating the authority. Along with this, the authority has received double A plus rating for the third time in a row.
The rating is done by analyzing the financial condition of the authority, assets, commercial and financial risk analysis, managerial ability, internal and external environmental elements that affect operational effectiveness.
An institution that receives a 'Double A Plus' rating has a high ability to meet its financial and financial obligations on time. Financial transactions with institutions with a 'Double A Plus' rating have low loan default risk. Credit rating is used to assess the credit quality of an individual or an organization and express an opinion. It provides an opinion as a simple and understandable indicator of the risk inherent in the institution's ability to pay its debt obligations.
The authority's executive director Kulman Ghising said that the authority has been able to obtain a 'double A plus' rating continuously for three years and this shows the financial health of the organization and its ability to repay debts. He said that the Authority is capable of bearing its financial and economic obligations with confidence.
The rating of the organization, which is an important criterion for issuing shares to the public, has been completed. We have evaluated the real assets of the organization. As soon as we get the approval from the government, the share issue process can be started," Ghising said, "We have planned to invest the money collected from the share issue in the construction of large hydropower projects." Ghising said that the plan is to complete the construction of electricity generation projects and the necessary system improvement and expansion to make the power supply more reliable, quality and safe. A primary share issue has been proposed for the general public by maintaining the paid-up capital of the authority at around 3 trillion rupees and adding a premium of up to 20 percent of that amount. It has been proposed to issue shares with a price of Rs 300 per share including premium. The annual income of the authority is 1 trillion 16 billion and the assets are more than 7 trillion rupees.
The authority has been established under the full ownership of the government to make electricity generation, transmission and distribution efficient, reliable and accessible. In addition to generating, transmitting and distributing electricity within the country, the Authority is doing domestic and cross-border electricity trading.
The government has been investing in the authority through annual budget allocation, investment in shares (cash or interest/debt capitalization) and other necessary funds/operations to implement the electricity development program. The authority is a strategic organization of the government, fully owned by the government, having a monopoly on electricity transmission, distribution and buying and selling electricity within and outside the country.
The authority has signed a long-term power purchase agreement (PPA) of about 11,000 megawatts with hydropower projects to be built by domestic and foreign investors. The results of the rating show that there is no investment risk as the authority has a high level of financial capacity to pay for such projects. To reduce technical and non-technical electricity leakage, increase access to maximum customers, reduce financial expenses, increase revenue, improve institutional governance to expand transmission and distribution lines and substations, the authority has achieved great success in earning profit.
In 2072/73 there was a net loss of 8.89 billion rupees, but in 2073/74, Pradhiran started the history of profit by making a net profit of 1.50 billion rupees. In 2080/81, it made a profit of 14 billion 46 crore rupees. In 2072/73, the authority had a accumulated loss of 34 billion 61 million rupees and has now reached a accumulated profit of 47 billion 41 million rupees. In the last financial year, the authority reduced the electricity leakage of the system to about 12.73 percent.
