INTERNSHIP REPORT ON

KRITI CAPITAL & INVESTMENT

Submitted To

Apex College, Internship Management Team

In the partial fulfillment of requirements for the degree of

Master of Business Administration (MBA)

Submitted By

Basanta Bhetwal

PU Registration No.: 2017-2-22-0305

PU Exam Roll No.: 17220251

March, 2019

Kathmandu
 DECLARATION

I declare that this internship report on “Kriti Capital & Investment” is my own
original work. Where other people’s work has been used, I have correctly
acknowledged it with accordance to the university standards.

I confirm that I have not used work previously produced by another student or any
other person to hand in as my own.

I have not allowed and I will not allow anyone to copy my work with intention of
passing it off as his or her own work.

………….....................

Basanta Bhetwal

MBA V Trimester

March, 2019

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 ACKNOWLEDGEMENT

I would like to take an opportunity to express my thankfulness and appreciation to

those who have supported me to complete my project correctly and in time. Firstly I
would like to thank Apex College for providing the opportunity to do eight weeks of
Internship to gain the practical experience in the field of my interest.

I would like to thank my teachers, co-workers, friends, and advisors for continuous
support in each and every step of this project.

The most important persons who have supported me to complete my project are my
Supervisor Mr. Punya Ram Kasichhwa, In-Charge of PMS Trading & Research, Mr
Niraj Ghimire, Portfolio Manager, Mr Bijay Adhikari, Portfolio Manager and Mr
Sadan Lamichanne, Corporate Financial Advisory. I would like to express my deep
appreciation and gratitude towards them. Each and every personal helped me to learn
different things and helped me to grow as a person. I was able to learn different things
due to contribution of these individuals.

Sincerely,

Basanta Bhetwal

March 2019

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 TABLE OF CONTENTS

CONTENTS

DECLARATION.........................................................................................................i

ACKNOWLEDGEMENT.........................................................................................ii

TABLE OF CONTENTS..........................................................................................iii

ABBREVIATIONS.....................................................................................................v

EXECUTIVE SUMMARY.......................................................................................vi

CHAPTER ONE.........................................................................................................1

INTRODUCTION......................................................................................................1

1.1 Background of Internship............................................................................1

1.2 Objectives of Internship...............................................................................1

1.3 Selection of Organization............................................................................1

1.4 Placement in Organization...........................................................................2

1.5 Duration of Internship..................................................................................2

CHAPTER TWO........................................................................................................3

ORGANIZATIONAL ANALYSIS...........................................................................3

2.1 Establishment...............................................................................................3

2.2 Mission and Vision......................................................................................3

2.3 Organizational Structure..............................................................................4

2.4 Major Products and Services.......................................................................4

2.5 SWOT Analysis...........................................................................................7

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CHAPTER THREE....................................................................................................8

INTERNSHIP EXPERIENCE..................................................................................8

3.1 Internship Activities.....................................................................................8

3.1.1 Major Activities Performed......................................................................8

3.1.2 Problems Identified:...............................................................................11

3.1.3 Solutions to Problems............................................................................12

3.2 Internship Achievements...........................................................................13

3.2.1 Skills Development................................................................................13

3.2.2 Networking Development......................................................................14

3.2.3 Application of Theory into Practice.......................................................14

3.2.4 Career Path.............................................................................................15

CHAPTER FOUR....................................................................................................16

CONCLUSION AND RECOMMENDATIONS....................................................16

4.1 Conclusion.................................................................................................16

4.2 Recommendations......................................................................................16

4.2.1 Recommendations to the Organization..................................................16

4.2.2 Recommendations to the College...........................................................17

BIBLIOGRAPHY.....................................................................................................18

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 ABBREVIATIONS

DEMAT Dematerialization

DPR Dividend Payout Ratio

EPS Earning Per Share

FPO Further Public Offering

GWH Giggawat Hour

IPO Initial Public Offering

MS Microsoft

MW Megawatt

NEPSE Nepal Stock Exchange

P/E Price Earnings Ratio

PLF Plant Load Factor

PPA Power Purchase Agreement

PU Pokhara University

SHPC Sanima Mai Hydropower Company

SWOT Strength, Weakness, Opportunity and Threats

USD US Dollar

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 EXECUTIVE SUMMARY

The report is prepared as partial fulfillment of Masters in Business Administration.

The report describes the objectives of internship, how intern got in the organization,
overview of the organization including its establishment, mission and vision,
organization structure and SWOT Analysis. The report describes the tasks that the
intern performed in the organization in eight weeks period of time and these tasks
include:

 Research
 Financial Projection
 Valuation

The intern faced different challenges in this process mainly lack of knowledge of
hydropower companies, not having specific instructions on how to complete the task
and assigning of multiple tasks and unrelated tasks which the intern solved by
studying prospectus and annual report of companies, having constant communication
and research, and completing the important task ahead. The intern got to learn various
hard skills and soft skills from the internship process which the intern believes would
help him in his career growth in future.

In nutshell the internship experience has helped the intern to get knowledge of
practical work organization and helped intern to get various hard and soft skills. From
working in Kriti Capital and Investments the intern believes that the intern had more
knowledge about hydropower companies and capital market of Nepal. The internship
was a fruitful experience that intern got and hopes to use the skill learned in future as
well.

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 CHAPTER ONE

INTRODUCTION

1.1 Background of Internship

This report is submitted for the partial fulfillment of Masters in Business

Administration. It incorporates the overall activities performed and the findings
obtained as an intern in Kriti Capital and Investments Ltd. It includes experiences that
compliment what is learnt in the classroom and contributes to the student’s personal
and professional development through challenging work assignments. The internship
was undertaken to gain insight about the practical experience of working field and to
learn new skills.

1.2 Objectives of Internship

The objectives of internship are listed below:

 To have an exposure of the real working environment.

 To understand the gap between the theoretical knowledge and practical
applications.
 To build up interpersonal skills that is required in the real working
environment.
 To gain knowledge of how stock market works and the factors that can
influence price of a stock.

1.3 Selection of Organization

For the fulfillment of the course and to apply my theoretical knowledge I opted to
apply for investment companies in Nepal. In the process the intern applied to
Hathway Investments and Kriti Capital Investments. As the intern had easier access to
Kriti Capital & Investments the intern opted to go for Kriti Capital & Investments.

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Being Finance specialized student intern thought internship at Kriti Capital &
Investments would be beneficial.

1.4 Placement in Organization

The intern had been placed in Trading Department by Human Resource Department
of the organization. For 8 weeks the intern got opportunity to do internship in the
Trading Department where the intern got opportunity to learn about hydropower
companies and also learn about technical analysis and tools.

1.5 Duration of Internship

The duration of internship at Kriti Capital and Investments was 8 weeks, commencing
from Dec 27, 2018 to February 20, 2019, as per the requirement of Pokhara
University. The intern got opportunity to work in Trading Department in Kriti Capital.
This task helped intern to develop my knowledge about share market, build
interpersonal relationships and to gain valuable practical insights on various
theoretical knowledge. These eight weeks has been very fruitful for the intern to get
insight of the NEPSE, hydropower companies and technical analysis as a whole.

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 CHAPTER TWO

ORGANIZATIONAL ANALYSIS

2.1 Establishment

Kriti Capital & Investments Ltd., established in 2011, is one of the pioneer investment
banking and investment management service providers of Nepal. Kriti Capital works
with the motto of "Creating Growth Opportunities". Upholding its motto, Kriti Capital
promotes entrepreneurial initiatives and fosters institutional development by making
necessary capital available to committed and dynamic entrepreneurs.

Kriti Capital has been authorized as a public limited company, and also has been
licensed by the Securities Exchange Board of Nepal (SEBON) to work as a Merchant
Banker.

2.2 Mission and Vision

“To be a leading Investment Banking & Investment Management institution providing

innovative, sustainable and value adding financial services to create growth
opportunities for individuals and organizations; to promote entrepreneurial initiatives
and thus elevating investment ecosystem.”

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2.3 Organizational Structure

Managing Director

Investment Banking Customer Relationship Trading and

Management Operations Research HR

2.4 Major Products and Services

 Portfolio Management Services

As a licensed portfolio manager, Kriti Capital manages over NPR 570 million of
funds of individual and institutional investors who aim to build a diversified
portfolio with minimized risk and maximized returns. Kriti Capital assists in
identifying needs, determining risk profile, defining objectives, and finally setting
investment strategy. Kriti Capital works diligently to ensure optimal returns on
your investments by building a portfolio from a range of asset classes, such as
equity and fixed income instruments. Customer can choose between the following
two unique services that suit to their requirement at best:

o Discretionary Portfolio Management

o Non-Discretionary Portfolio Management

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 Depository Participant and Demat Services

As a licensed merchant banker, Kriti Capital work as a Depository Participant

(DP) and offers DEMAT account services. The DEMAT account helps one to
convert and hold securities in electronic or dematerialized form. With a DEMAT
account, risks associated with holding securities in physical certificates are
eliminated, and transactions of securities are made more efficient. Kriti Capital
provides following services:

o Opening of Beneficial Owner Account (DEMAT Account)

o Dematerialization and re-materialization of securities
o Safeguarding of securities in electronic form
o Settlement of trades by transferring/receiving the securities from/in BO
accounts
o Facilitating in pledge/unpledged, freeze/unfreeze of dematerialized
securities
o BO to BO (Beneficiary Owner) transfer of securities
o Family name transfer/ death name transfer of securities
o Mero Share online DEMAT portal service.
o Other functions as allowed by laws and regulations in regards to
securities depository.

 Corporate Financial Advisory

Kriti Capital Corporate Finance Advisory wing has helped raise over USD 15
million of debt and equity for emerging enterprises in five different sectors. Kriti
Capital works with enterprises at all stages of expansion to provide them with
financial advice on a broad range of corporate finance issues, and capital
optimization strategies. The services include raising capital and providing
corporate finance advice, predominantly to young and growing enterprises.

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 Private Capital and Venture Capital Advisory Services

Private Equity and Venture Promotion Service are blended with true
professionalism and Kriti Capital's expertise to provide/arrange capital as well as
operational support to the growing companies. Our expertise lies in unlocking
values of the companies with growth potential during different stages of deal-
making. Our team extensively works in creating values for both portfolio
companies and investors, that last long.

 Research

Leveraging the experience in Nepali capital market industry of Nepal, Kriti

Capital serves its clients with the most appropriate market research on the product,
services, and regulations governing capital markets. Under this service, we
conduct:

o Research on Capital Market

By far, Nepali capital market still struggles to mature out of its infancy
period. At Kriti Capital, we leverage this as an opportunity to bring out
more flexibility and creativity to conduct our research. In this course,
studies on IPO valuation, private equity, FPO ratings, FPO share valuation,
etc. become the most important ones. We have successfully carried out
studies on the same issues. Similarly, we have also conducted numerous
researches for Nepal Stock Exchange (NEPSE) and Securities Board of
Nepal (SEBON).

o Macroeconomic Insights

The research team at Kriti Capital provides a monthly-insight on the

macroeconomic trends in Nepal. Such insights are to serve the purpose of
providing a hands-on update on the relevant indicators such as inflation,
money supply, monetary and fiscal policies.

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 o Independent Research on Industry & Companies

Kriti Capital conducts rigorous fundamental and technical analysis on

individual companies. These analyses help identify undervalued and
overvalued companies and subsequently use the information to aid trade
stocks and make an investment decision.

o Individual Investors

Serving the purpose of helping individual investors for their informed and
wise investment decisions, Kriti Capital publishes weekly technical
analysis of the secondary market.

2.5 SWOT Analysis

Strength Weakness

• Reputed investment company. • Dependent on decision of head of

• Large Customer Base. the company.
• Underwriter as well as investment • Human Resource and Account
company. being managed by same person.

Opportunity Threats

• Increasing interest in capital • Existing investment companies in

market. Nepal.
• Increasing investment in capital • New investment companies
market. emerging.
• Ease in trading. • Change in regulations regarding
capital market and investment
policy.

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8
 CHAPTER THREE

INTERNSHIP EXPERIENCE

3.1Internship Activities

The intern was responsible to conduct various activities to suit the need of the
organization and to achieve the goal of the organization. The supervisor assigned
roles as per the requirement of the department where the tasks needed to be
completed.

3.1.1 Major Activities Performed

The major activities that were performed by the intern are given below:

 Departments Assigned: The intern was assigned at trading department of

Kriti Capital and Investment as intern was keen to learn about the stock
trading of NEPSE and how market works to learn and invest in the market.
The intern was able to get the opportunity to learn about the market trend as
well as the analysis of company to see whether the stock is trading at fair
value.

 Descriptions of Roles & Responsibilities: The intern was assigned with

following roles:

o Research

The intern was firstly assigned to research on hydropower companies. The intern
had little knowledge of hydropower companies the intern researched about the
companies I was familiar with so I conducted research on Chilime Hydropower
Company and Butwal Hydropower Company at first. The intern first collected
basic data regarding earnings, profit, revenue from electricity, operating expenses,

9
 dividend history etc. As the intern researched more about the company I found out
that one hydropower has many projects and they have also invested in different
subsidiaries that overlook the hydropower construction in different hydropower
companies. The intern was collecting the data in similar fashion of available
hydropower companies that are listed in the share market. Out of 22 hydropower
companies listed in the stock market the intern collected general information on
14 of the hydropower looking at the projects of the hydropower, their earnings,
sales and other fundamental aspects of the hydropower companies. As the intern
was only looking on a surface basis to gain general insight on hydropower the
intern did not have detailed information and analysis of any companies that is
listed in the stock market.

The intern was then assigned to do an in depth study of Sanima Mai Hydropower
its current and future projects, loan, energy generation and other details of the
project. From the study of Sanima Mai Hydropower Project the intern found that it
is currently operating 29 MW hydropower namely Mai Hydro of 22 MW and Mai
Cascade of 7 MW. The details of the study are shown below:

Projects Details
Mai Hydro 128.298 GWH 22.11 GWH in dry 103.03 GWH in
annually season wet season
22 MW
122.1 m gross
head
Mai Cascade 38.422 GWH 6.322 GWH in dry 32.099 GWH in
annually season wet season
7 MW
42.65 m gross
head
Future Projects
Lower Likhu 170.85 GWH 30.94 GWH in dry 139.9 GWH in
season wet season
28.1 MW
118m gross head
Middle Tamor 309.56 GWH 46.48 GWH in dry 263.08 GWH in
season wet season
54 MW
94m gross head
Upper Mailung 79.66 GWH 13.16 GWH in dry 66.5 GWH in wet
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 season season

14.3 MW
495m gross head

In similar fashion the intern researched on Radhi Hydropower, Api Hydropower

Company, Ngadi Group Power Company, United Modi Hydropower company, Ridi
Hydropower Company, Chilime Hydropower and Butwal Power Company Limited.

o Financial Projection

Later the intern was assigned to build a financial model of Radhi Company. To build
a financial model the intern had to first build revenue projection of the company
based on the electricity that the company can generate in successive years and the
PPA rate the government has specified. This is calculated on the basis of PLF of the
hydropower company which is then divided into dry and wet season for varied
electricity production. After calculating the revenue the costs needed to be calculated
to find out the net income. Most of the costs were based on percentage of cost of
sales as the actual cost is not known. The intern then forecasted the loan payment
model and interest to be paid. As the loan is paid on balloon payment model the
intern first built balloon payment model to estimate loan payment and interest to be
paid by the organization. After all the revenue and expenses we got to know the net
income the company is going to generate over the years to see its financial position.

o Valuation

The intern was also assigned to conduct the valuation of the companies. The intern
conducted valuation of Butwal, Chilime and SHPC. The valuation of the
companies is done on free cash flow of equity of the company. For conducting the
valuation of these companies the valuation of its subsidiaries needed to be
conducted. So at first the intern conducted valuation for subsidiary companies on
basis of which the estimation of dividend to be provided was found out which was
included as dividend income to the parent company.

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 3.1.2 Problems Identified:

The major problems that were identified by the intern are given below:

 Lack of Knowledge of Hydropower Companies

The organization members did not have enough information about the hydropower
companies. They did have information about the hydropower companies but they
were not fully sure about the information available as they had not done prior
research in hydropower companies. They treated hydropower as other companies
as well taking loan in equal payment but loan payment is based on balloon
payment model in most hydropower companies.

 Specific Instructions on Completing the Task

The intern was given certain roles and responsibilities but it was not defined how
to do the task. In many cases the intern had to use the knowledge gained from
course and searching in the internet to complete certain tasks. As I told that I am
from finance background the staff may have thought that I must have knowledge
on the topic but the intern did not have knowledge on the entire topic to be
covered.

 Assigning of Multiple Tasks and Unrelated Tasks

The intern was assigned on time to time certain unrelated tasks. The intern was
conducting the financial model of Chilime Power Company and the supervisor
told the intern to research about Upper Tamakoshi Hydropower as Upper
Tamakoshi was going to be listed in NEPSE soon. Although Upper Tamakoshi is
also hydropower company but it is completely different from other hydropower as
it is a large scale hydropower company so it has loan in USD as well. So it’s a bit
different than other hydro currently operating hydropower so the intern had little
knowledge on such hydropower.

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 3.1.3 Solutions to Problems

 Study of Prospectus and Annual Report

The intern collected data from many prospectus and annual report of companies
to learn about the PPA rates and the loan payment model of hydropower
companies. The intern was also helped by the information of PPA rate of one of
the hydropower company that was available in the office itself. It helped the
intern to learn about the escalation rate and also the loan payment model which is
balloon payment model mentioned in various annual report.

 Constant Queries and Research

The intern asked various queries to different personnel to help him on completing
the assigned task. The intern got help from almost all department of organization
who had different knowledge on hydropower projects and solar projects to aid
him in the process of financial analysis, projection and valuation of company.
The intern also got support from supervisor and department members who
provided vital information beforehand time to time to help intern complete the
task.

 Completing the Important Task Ahead

The intern completed the important task ahead as assigned by the department
member. The intern did the task with the knowledge and skill I had and did what
the intern was assigned by the department member and focus on the other task
that was already assigned later when the task was completed.

3.2Internship Achievements

The internship helped in learning various knowledge and skills. In general the intern
learnt that a hydropower company has many subsidiaries through which it runs
various projects. The hydropower companies are provided subsidy by the government

13
to encourage hydropower and there is also tax exemption for hydro companies to
promote more hydropower companies in the country. Internship in investment
company helped to learn about the capital market, trend of market, culture, the
operation module of investment company, realized socialization process at a glimpse,
learnt how to be more efficient and effective at the tasks assigned and such. Apart
from these, the intern got to realize his strengths and weaknesses in the internship
period in Kriti Capital & Investments Ltd. The intern got the opportunity to learn
about job related skills, and mobilize the period to better groom the intern with
different skills such as excel skills, communication skills, time management skills and
so on. Similarly, the program became fruitful at realizing the actual demarcation
between the personal and professional life while the intern equipped himself with the
real life experience of organizational setting and interactions. In broad sense, the
intern has found the internship program as an opportunity to explore underlying
perspective and potentials in his career path

3.2.1 Skills Development

 MS Excel

As the intern did most of his work on Microsoft Excel I got to learn a great deal of
excel functions and skills which the intern believes would be very beneficial in the
future as well. The intern believes his excel skills are greatly improved by joining
the organization and there will be increase in future as well.

 Good Communication Skills

The intern needed to constantly interact with the supervisor and the department
members at Kriti Capital & Investment. The intern had to ask the department
members if the intern had any confusion. The department members also used to
consult to the intern about the progress so there was constant back and forth
communication.

 Time Management

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 Managing of time while dealing with various tasks was very important. The intern
needed to fulfill a certain amount of task in a week and report to the supervisor.
Completion of the tasks assigned within a speculated time turned out to be a vital
strength.

 Relationship Building

Internship helped the intern to build relationship with staff members quite well.
The intern got to interact with other staff members time to time and asked queries
too time to time.

 Punctuality, time management and patience are very important in work place.

3.2.2 Networking Development

During internship period of two months and working under different hydropower
projects and interacting with different departments has helped to build a good
relation and network over this time. It has helped me to build relationship with
professionals both inside and outside of the organization.

3.2.3 Application of Theory into Practice

During eight week of internship program, intern had worked in trading and research.
Throughout the tenure the intern found out that the academic curriculum is correlated
with the practice. The intern got to apply various concepts in the organization like
balloon payment model, EPS, P/E, DPR. The intern got to learn new things like free
cash flow and valuation from the net income of the company which was a new
learning. So the various courses that has been studied at class has prominent role
during internship tenure in various aspect. The policies and strategies that were
developed by the organization at various levels showed the importance of in depth
understanding and planning. Similarly, the working culture of the organization
showed intern how important is it to set the objective for every activity in-order to
get the result.

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 3.2.4 Career Path

The intern got to know about trading in the stock market and the factors affecting the
stock market. The intern developed various skills about technical analysis as well as
fundamental analysis like valuation. The intern got to know about stock market quite
a lot. The intern believes that with this knowledge the intern will be able to work in
stock market in the future. The intern believes that the intern will be a good fit in the
capital market in the future or have his own company related to the field.

16
 CHAPTER FOUR

CONCLUSION AND RECOMMENDATIONS

4.1Conclusion

The internship is done for to have an exposure of the real working environment, to
build up interpersonal skills and to gain knowledge of how stock market works and
the factors that can influence price of a stock. To achieve this objective the intern did
eight weeks internship on Kriti Capital & Investment under Trading and Research
department where I got to learn about research, financial projection and valuation of
different hydropower companies and how the hydropower company works. The intern
also faced different problems in the workplace like lack of knowledge of hydropower
companies, not having specific instructions on how to complete the task and assigning
of multiple tasks and unrelated tasks which the intern solved by studying prospectus
and annual report of companies, having constant communication and research, and
completing the important task ahead. The internship has helped the intern to develop
excel skills, good communication skills, time management and relationship building
skills.

4.2Recommendations

4.2.1 Recommendations to the Organization

During eight weeks of the internship the intern got an opportunity to observe the
professional life. Though the theoretical knowledge gained at classroom was very
helpful to understand the real working environment, many gaps were found between
the theoretical aspects learnt and observed. The organization has strict rules and
regulation each member must abide by. The intern had a great time in the
organization. Some of the recommendations that the intern has to make to the
organization are as follows:

 Give intern opportunity to learn about different departments and their roles.

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  Be more friendly and interactive with the intern.
 Have more flexible rules and regulations.
 Teach the intern basic things on the tasks to be done.

4.2.2 Recommendations to the College

Internship is an opportunity to observe, learn and understand the corporate culture,

acquire knowledge and skills in the respective field which helps the students in their
further career development. The intern is glad that Pokhara University has included
internship in the course. Some of the recommendations that the intern likes to make
college are given below:

 Communicate with the organization it has relation with to know about

internship opportunities beforehand.
 Take feedback from students about the workshop conducted and see whether
workshop was fruitful.
 Try to shorten the internship period.

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 BIBLIOGRAPHY

(n.d.). Retrieved from Kriti Capital & Investments: http://kriticapital.com/

19