Sumnima Hydropower Appoints Machhapuchhre Capital as IPO Manager for Upper Pikhuwa Project
24th October 2025, Kathmandu
The strategic alliance between Sumnima Hydropower Limited and Machhapuchhre Capital Limited to manage the Initial Public Offering (IPO) for the 4.9 MW Upper Pikhuwa Hydropower Project in Bhojpur marks a crucial milestone in Nepal’s journey toward energy self-sufficiency.
Sumnima Hydropower Appoints IPO Manager
This partnership is far more than a routine corporate transaction; it represents the mobilization of public capital to power a nationally important renewable energy project, setting the stage for Sumnima Hydropower to become a publicly listed company.
The Upper Pikhuwa project, a run-of-river scheme, is a key contributor to the nation’s growing energy matrix. By appointing a prominent merchant banker like Machhapuchhre Capital, Sumnima Hydropower is taking the final, pivotal step in its financing cycle: inviting the general public, including locals affected by the project, to share in its ownership and growth.
The Critical Role of the IPO Manager in Hydropower Financing
Machhapuchhre Capital, appointed as the Issue Manager and Sales Manager, assumes a multifaceted and crucial role in navigating the complex regulatory and financial landscape of a Nepali IPO. For a capital-intensive hydropower project like the Upper Pikhuwa, the IPO serves to inject necessary equity capital, reduce debt burden, and fulfill regulatory obligations to the public.
Key Responsibilities of Machhapuchhre Capital:
Regulatory Compliance and Documentation: The Issue Manager is responsible for the rigorous preparation of all documents required by the Securities Board of Nepal (SEBON) and the Company Registrar’s Office. This includes drafting the detailed Offer Document (Prospectus), which provides investors with a comprehensive overview of the company, the project’s financial viability, its engineering status, and the risks involved. Given the recent regulatory scrutiny on hydropower IPOs concerning net worth and project progress, the manager’s expertise in compliance is paramount.
Structuring and Pricing the Issue: Machhapuchhre Capital will determine the ideal size of the public issue. Sumnima Hydropower has stated its intent to issue 20% of its issued capital to the general public, including the mandated quota for project-affected locals. The manager advises on the pricing strategy (at par value or premium, subject to regulatory approval) to ensure the issue is attractive to investors while meeting the company’s capital needs.
Marketing and Distribution: This merchant banking partner handles the marketing, promotion, and overall distribution of the shares to prospective investors across Nepal. This ensures maximum public participation, which is vital for a sector that relies on public trust and investment. The manager oversees the application and collection process through the C-ASBA system.
Allotment and Settlement: Post-application, the manager meticulously manages the allotment process, which involves a fair and transparent distribution of shares as per SEBON guidelines. Finally, they ensure the shares are credited to the successful applicants’ Demat accounts and that refunds are processed for unsuccessful applicants.
This expertise is particularly valuable for hydropower companies, which typically issue IPOs during the construction phase (often after 60-65% physical progress) to raise supplementary equity, unlike other industries that wait for operational maturity.
Powering Bhojpur: The Upper Pikhuwa Project
The Upper Pikhuwa Hydropower Project is a 4.9 MW run-of-river (RoR) project utilizing the water flow of the Pikhuwa River in the Temkemaiyung Rural Municipality of Bhojpur district. This project is a tangible investment in the Eastern region’s infrastructure and economy.
The financial model of such projects in Nepal usually adheres to a high debt-to-equity ratio (often 70:30), making the successful mobilization of equity through the IPO a critical step in completing the financial closure. The IPO proceeds will likely be earmarked for the final stages of construction, or, critically, for debt repayment, thereby strengthening the company’s balance sheet before it transitions into commercial operation.
Broader Impact on the Renewable Energy Sector:
The issuance of shares by Sumnima Hydropower reinforces the government’s policy of promoting public ownership in key infrastructure. By involving the public, especially those in the project area, the company fosters a sense of local partnership and reduces the likelihood of social or political hurdles during construction and operation. Furthermore, the success of the Upper Pikhuwa IPO will send a positive signal to the market, encouraging investment in Nepal’s ambitious hydropower development agenda.
The partnership between Sumnima Hydropower and Machhapuchhre Capital is a vital mechanism for converting the nation’s immense water resources into tangible economic assets, providing investors with an opportunity to participate directly in Nepal’s most critical infrastructure sector. The forthcoming IPO is highly anticipated as it will directly contribute to generating clean, renewable power and delivering financial returns to a broad base of new shareholders.
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