Bindhyabasini Hydropower to Issue Rights Shares
4th November 2025, Kathmandu
Bindhyabasini Hydropower Development Company Limited (BHDC) has announced a strategic move to bolster its financial foundation by resolving to issue rights shares equivalent to 100% of its existing paid-up capital.
Bindhyabasini Hydropower Rights Shares
This major decision, made by the Board of Directors on Kartik 17, 2082, aims to raise substantial capital crucial for the company’s expansion and stability within the energy sector.
Key Details of the 1:1 Rights Issue
The issuance is structured to offer existing shareholders a proportionate opportunity to reinvest in the company’s growth.
Capital Raise Mechanism
The Board has proposed a 1:1 rights ratio, meaning one new rights share will be issued for every one existing share held by the shareholder. Based on the company’s current financial data, this translates to the creation of an equivalent number of new shares, effectively doubling the company’s paid-up capital.
Current Paid-Up Capital (Approximate): NPR 1,129,800,000 (Based on 11,298,000 listed shares at NPR 100 face value).
Proposed Rights Shares (100%): 11,298,000 units (Approximate).
Total Expected Capital Raise: Approximately NPR 1.13 billion (before premium, if any).
Strategic Rationale for Capital Expansion
The decision to raise 100% of the capital base underscores the high capital demands typical of the hydropower industry and serves two critical objectives for BHDC:
Meeting Company Liabilities: The new capital will be used to reduce existing financial obligations, which will help improve the company’s debt-to-equity ratio and strengthen its balance sheet, thereby enhancing its financial health.
Investment in Hydropower Projects: The funds are designated for investment in its ongoing and future hydropower projects. BHDC is already involved in the development and operation of projects in the Rudi Khola corridor, including the Rudi Khola-A Small Hydropower Project (8.8 MW) and the Rudi Khola B Small Hydropower Project (6.6 MW). The new capital will support the financial requirements of these projects and potentially finance new ventures.
Regulatory Hurdles and Shareholder Impact
The rights issue is a multi-stage process that requires formal assent from both regulators and the company’s owners.
Regulatory and Corporate Approvals
Before the shares can be offered to the public, the proposal must clear key regulatory and corporate approval stages:
Shareholder Ratification: The proposal must first be ratified by the company’s shareholders at the upcoming Annual General Meeting (AGM).
Regulatory Pre-Approval: Final issuance approval is contingent upon securing the necessary permissions from the key regulatory bodies governing the Nepali capital and energy markets, primarily the Securities Board of Nepal (SEBON) and the Electricity Regulatory Commission (ERC).
Benefits to Existing Shareholders
The 1:1 rights issue is generally viewed favorably by shareholders as it offers them distinct financial advantages:
Preventing Dilution: By exercising their right to purchase the new shares, existing shareholders can maintain their proportional ownership in the company, ensuring their voting rights and claim on future profits remain undiminished.
Discounted Acquisition: Rights shares are typically issued at par value (NPR 100). Considering the current market price of BHDC shares (recently trading in the range of NPR 530-540), this provides shareholders with an opportunity to increase their investment at a significant discount compared to buying the shares on the secondary market.
This capital expansion is a decisive step by Bindhyabasini Hydropower Development Company Limited to enhance its operational stability and finance its long-term growth trajectory in Nepal’s vital hydropower sector.
For More: Bindhyabasini Hydropower Rights Shares
