Many of the companies that entered the capital market during 2011 to 2013 declared lower post-listing dividends than what they had offered before going public.
The audit reports of the companies as in their prospectuses and the available information about them on the Dhaka Stock Exchange (DSE) website indicate a downward trend in their post-listing dividend payment.
Some of the companies, however, cited political unrest and other obstacles as the reasons for their failure to offer dividend at satisfactory rates.
Experts said the companies' paid-up capital increased on their going public but not their earnings in one or two years.
"That's why the companies' dividends decline after their listing with the stock exchanges. On the other hand, some companies may have the tendency of showing inflated earnings before going public to get good premiums on their face value," said Faruq Ahmad Siddiqi, former chairman of Bangladesh Securities and Exchange Commission (BSEC).
Deshbandhu Polymer went public in 2011. It issued 15 per cent stock dividend in the year. But later in 2012 the company gave 5.0 per cent cash dividend. In 2012 and 2013 the percentages were 5.0 per cent and 10 per cent respectively.
Barkatullah Electrodynamics went public in 2011. It gave 20 per cent stock dividend in 2011 and 21 per cent stock dividend in 2012. In 2013 the company's dividend came down to 5 per cent and in 2014 it hit 17 per cent.
Rangpur Dairy & Food Products offered 12 per cent bonus dividends in 2011, the year it had gone public. Later in both 2012 and 2013 the company's dividend dropped to 10 per cent.
In 2012 the Aamra Technologies went public. Earlier it gave 109 per cent stock dividend in 2008, 74 per cent cash dividend in 2009 and 10 per cent cash dividend in 2010. Later in 2012 and 2013 the company's dividend dropped to 20 per cent and 10 per cent respectively.
Md. Anamul Haque, company secretary of Aamra Technologies, said it was not true that the company went public showing an inflated growth which declined afterwards.
"Business competition in the IT sector has intensified. Despite having good corporate reputation our company has failed to do business up to the expectation because of the adverse situation," Mr. Haque added.
Envoy Textiles offered 5.0 per cent bonus in 2012, the year it got listed with the stock exchange. Later in both 2013 and 2014 the company gave only 3.0 per cent dividend.
The company, however, recommended 12 per cent cash dividend and 3.0 per cent stock dividend for the year ended on September 30, 2014.
In 2013 Summit Purbanchol Power Company entered the stock market. Before that it issued 30 per cent bonus
in 2012. But in 2013 the company gave only 10 per cent bonus dividend. Argon Denims issued 20 per cent stock dividend in 2012. In 2013, the year it went public, the company's board of directors recommended 15 per cent stock dividend and 6.0 per cent cash dividend.
Golden Harvest Agro Industries issued 20 per cent bonus in 2012. In 2013 it entered the stock market. In that year the company gave only 5.0 per cent stock dividend. However, the company's board of directors recommended 10 per cent cash dividend for the year ended on June 30, 2014.
Company Secretary of Golden Harvest Agro Industries Nirmol Chandra Sardar said: "We have expanded our business by using the IPO fund but the returns are not yet satisfactory as distribution of products was hampered due to the ongoing adverse situation. But our company has achieved its certain level of growth."
Global Heavy Chemicals was listed on the local stock exchanges in 2013. The company gave 12.50 per cent cash dividend for the year ended on December 31, 2011. But in 2012, 2013 and 2014 the company declared no dividend for the shareholders. Appollo Ispat Complex also entered the stock market in 2013. The company issued 15 per cent stock dividend for the year ended on June 30, 2014.
SK Abul Hassan, company secretary of Appollo Ispat Complex, said their business plan was being implemented as projected. "But the ongoing obstacle may hamper our dividend payment," Mr Hassan said.
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Post-listing periods see fall in dividend payment
Mohammad Mufazzal | Published: March 17, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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