29th October 2025, Kathmandu
Khani Khola Hydropower Company Limited is executing a crucial phase in its capital mobilization strategy by opening an auction for its unallotted rights shares.
Khani Khola Hydropower Rights Shares
This sealed bidding process, which makes 459,349 units of ordinary shares available to all categories of investors, is a standard yet pivotal step for any public company seeking to fully consolidate its equity capital following an initial rights offering. This move not only ensures the efficient allocation of unsubscribed shares but also reinforces the company’s commitment to corporate transparency and market-driven price discovery in the Nepalese stock market.
The Mechanism of the Unallotted Share Auction
The auction is a critical regulatory practice designed to sell off the shares that existing shareholders chose not to subscribe to during the primary rights issue period (3rd Bhadra to 5th Ashoj 2082). By moving to an open auction, Khani Khola Hydropower ensures that the remaining shares are not simply left unsold, but rather purchased by the broader market at a price determined competitively.
Key Details for Prospective Bidders
The auction structure is designed to be inclusive, welcoming both retail and institutional investors to participate in the competitive bidding process:
Total Shares on Offer: 459,349 units of ordinary shares.
Minimum Bid Price (Floor Price): The price is set at NPR 100 per share (the par value). Bidders must submit a price equal to or exceeding this floor.
Minimum Bid Quantity: Investors must bid for a minimum of 100 shares.
Maximum Bid Quantity: Bidders have the flexibility to apply for the entire remaining quantity, ensuring large institutional or corporate investors can secure a significant stake if their bid is successful. The maximum bid is up to the nearest divisible multiple of 10 for the total quantity.
Bidding Period: The auction remains open from 12th Kartik to 19th Kartik 2082 (Wednesday), closing at 3:00 PM.
This competitive mechanism is crucial because the final successful bid price (cut-off price) will likely be higher than the floor price, reflecting the current market demand and providing the company with maximum capital injection per share sold, which is a gain over the fixed rights price of NPR 100.
Capital Mobilization and Impact on the Hydropower Sector
For Khani Khola Hydropower, the successful completion of this auction is fundamental to its immediate and long-term financial health. The company had previously issued the rights shares to enhance its capital base and strengthen its financial structure.
Strategic Financial Objectives
The capital raised from this auction is earmarked for critical developmental and operational purposes:
Project Financing: The proceeds will directly support the company’s ongoing hydropower projects and operational expansion. Hydropower projects in Nepal are highly capital-intensive, making timely and successful equity financing essential for maintaining project timelines and avoiding cost overruns.
Debt Restructuring: While not explicitly stated, one primary use of rights issue proceeds for many hydropower companies is to repay outstanding bank loans. A reduction in debt improves the company’s debt-to-equity ratio and significantly lowers finance costs, thereby enhancing future profitability.
Infrastructure Development: Funds will be channeled toward necessary infrastructure development, ensuring the sustained efficiency and longevity of the company’s generating assets.
By mobilizing investment through a transparent, market-based system, Khani Khola Hydropower demonstrates its role in bolstering renewable energy production and supporting Nepal’s national goal of increasing energy self-sufficiency, which is vital for the nation’s economic growth.
Investment Opportunity and Regulatory Oversight
The open nature of the auction is a powerful tool for investor inclusion, as it allows individuals, institutions, and corporate entities—including founding shareholders—to participate on equal footing. This mechanism is crucial for the Nepalese capital market:
Fair Allocation: Unlike the primary rights issue where only existing shareholders are eligible, the auction ensures shares are allocated to the highest bidders, maximizing the financial benefit for the company.
Widespread Accessibility: The extensive network of bid collection centers, including Citizens Capital Limited and various branches of Citizens Bank across Kathmandu, Lalitpur, and major cities like Biratnagar, Janakpur, and Pokhara, ensures broad geographic access for investors nationwide.
The company’s partnership with Citizens Capital Limited as the issue manager and auction facilitator provides a layer of professional and regulatory oversight, ensuring the entire process is conducted smoothly, efficiently, and in strict adherence to regulatory guidelines. This transparency is a key driver for maintaining investor confidence in the integrity of the market.
This auction represents a final, market-driven opportunity for investors to secure a stake in a key player within Nepal’s burgeoning energy sector, aligning personal investment goals with the company’s strategic growth and the nation’s development agenda.
For More: Khani Khola Hydropower Rights Shares