Bangladesh Securities and Exchange Commission on Tuesday approved initial public offering of Bashundhara Paper Mills Limited to raise Tk 200 crore by issuing shares at a higher price of Tk 72-Tk 80.
The commission on August 26 last year allowed BPML to conduct eligible institutional investors bidding under the book building method of public issue rules.
The commission, under new public issue rules, decided to offer BPML’s IPO shares to general and non-resident Bangladeshi investors at 10 per cent discount of cut-off price which was set by the bidding of the institutional investors.
As per the bidding of EIIs, the cut-off price of the company’s shares stands at Tk 80 which will be allotted to general investors along with NRB investors at Tk 72 each.
Stockbrokers said that the IPO price of Tk 72 for general investors was still too high considering its EPS of 1.46 per share.
The market regulator issued the approval in a commission meeting
presided over by its chairman M Khairul Hossain, a BSEC press release said.
Under the amended public issue rules, of the 2.6 crore IPO shares of BPML, 1.56 crore will be allocated to EIIs, 1.04 crore shares will be offered to the general and NRB investors.
The company will use the IPO fund in purchasing capital machineries, paying bank loans and meeting IPO expenses.
As per the entity’s audited financial statements for the year ended on June 30, 2016, the BPML’s net asset value per share and weighted average earnings per share were Tk 15.79 and Tk 1.46 respectively.
AAA Finance and Investment is the issue manager of the company’s IPO.
The commission decided to show cause for why the EIIs will not be declared ineligible who failed to provide proper reasons behind their bidding higher than the cut-off price.
The BSEC at the meeting also approved prospectus of an open-end mutual fund — IDLC Growth Fund— with an initial target size of Tk 50 crore.
Of the target size, IDLC Finance will provide Tk 10 crore as the sponsor of the fund, while the rest Tk 40 crore will be collected from general investors by selling its units.
The face value of the fund is Tk 10.
Bangladesh General Insurance Company will act as trustee and BRAC Bank as the custodian
of the fund and IDLC Asset Management Limited as its asset management company.
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