Mid Solu Hydropower Announces 15% Dividend Distribution
29th August 2025, Kathmandu
Mid Solu Hydropower Limited has announced its first-ever dividend distribution to shareholders since its Initial Public Offering (IPO) in 2023.
Mid Solu Hydropower Dividend
The company’s Board of Directors has proposed a total dividend of 15.79% for the fiscal year 2025/26, comprising a 15% bonus share and a 0.79% cash dividend for tax purposes. This significant move reflects the company’s strong financial performance and is expected to boost investor confidence in Nepal’s hydropower sector.
Financial Performance and Dividend Impact
The decision to distribute dividends so soon after its IPO is a direct result of the company’s impressive financial performance. According to its fourth-quarter financial statement for FY 2081/82, Mid Solu Hydropower posted a substantial net profit of NPR 132.14 million. The company’s profit saw an astounding increase of nearly 500% compared to the previous fiscal year, with earnings per share (EPS) rising to NPR 17.66. This robust performance is what enabled the board to propose the generous dividend. The company’s current paid-up capital stands at NPR 74.84 crore, and the proposed 15% bonus shares will increase this capital base, strengthening the company’s financial foundation for future projects. This strategy of reinvesting profits back into the company’s equity through bonus shares is a common and effective practice, as it indicates the company’s commitment to long-term growth.
The 0.79% cash dividend, though a small portion, is a crucial component as it covers the tax obligations on the bonus shares, ensuring that shareholders receive their bonus shares without an immediate tax burden. This demonstrates a thoughtful approach to shareholder value and financial management.
Significance for Investors and the Hydropower Sector
The dividend announcement from Mid Solu Hydropower holds immense significance, particularly for investors and the broader hydropower sector.
Bolstered Investor Confidence: This is the first time the company is distributing dividends after going public, a crucial step for building trust. Many new hydropower companies are a point of contention for investors in Nepal’s stock market, as some have high per-megawatt costs and high debt-to-equity ratios. A dividend payout from a newly listed hydropower company is a positive signal that the business is profitable and sustainable. This can alleviate investor concerns and encourage greater participation in the sector.
Positive Momentum for the Hydropower Sector: Hydropower is a critical part of Nepal’s economy, and its stock market has a large number of hydropower companies listed. The positive performance and dividend announcement by Mid Solu Hydropower serve as a beacon of hope, demonstrating the profitability potential within the sector. It can help change the narrative around hydropower shares, which are often seen as volatile and high-risk investments, and instead position them as viable options for long-term investors.
Capital Expansion for Future Growth: The bonus shares will increase the company’s paid-up capital, giving it a stronger financial position. This expanded capital base can be leveraged for future business expansions, such as undertaking new projects or modernizing existing ones. It allows the company to grow without having to immediately seek external financing, which can be expensive.
Regulatory Approval and Next Steps
The proposed dividend is not final yet. The announcement on NEPSE is a proposal that must follow a formal approval process. The decision is subject to the following key steps:
Electricity Regulatory Commission Approval: As a hydropower company, Mid Solu must first secure approval from the Electricity Regulatory Commission (ERC). This regulatory body ensures that the company’s financial decisions are sound and in line with sector-specific regulations.
Annual General Meeting (AGM) Endorsement: Once the ERC gives its green light, the proposal must be endorsed by the company’s shareholders at the upcoming Annual General Meeting. This democratic process ensures that the decision has the full backing of the company’s owners.
Upon receiving both approvals, the company will officially distribute the bonus shares and cash dividend to eligible shareholders. The timely payment of dividends is a key indicator of a company’s financial health and its commitment to rewarding shareholders for their investment. This entire process ensures transparency, compliance, and accountability in line with Nepal’s corporate governance standards.
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