Non-functional RSRM surges 48pc in 2 months
Sponsor-directors sold out holdings between FY15 and FY18
FE REPORT | Tuesday, 16 January 2024
Ratanpur Steel Re-Rolling Mills (RSRM) is out of operation for two years but its stock price has escalated by 48 per cent in the last two months.
The stock jumped from Tk 16.30 to Tk 24.10 a share since November last year, worrying the Dhaka Stock Exchange (DSE).
The DSE asked the company on Sunday if there was any change in the operational status of the company and whether the price surge was rational.
Answering the queries, the company said there was no undisclosed information to support the current market price hike.
In a factory inspection in April 2022, the Dhaka bourse discovered that the company had gone out of operation. The company had made no announcement of the closure of its production.
In June last year, the company confirmed that it was suffering an acute fund crisis and that there was no chance of business revival.
It disclosed financial results for FY21 for the last time.
The steelmaker was listed in FY14 in the stock market by collecting Tk 1,000 million from the primary market. The IPO shares were sold at Tk 40 per share with a Tk 30 premium.
In the year before the listing, the profit earned by the company was Tk 167 million, which increased to Tk 713 million in FY18.
After that, the company's income started falling. It finally went into the red in FY21, with a loss of Tk 380 million.
The data of the DSE shows that sponsors and directors of the company started to sell their holdings in FY15. Most of them finished selling their stakes by FY18 at the price of Tk 48 to Tk 91 per share.
Managing Director Maksudur Rahman, who was owner of 14.87 million shares, sold out 77 per cent of the stake or 11.5 million shares between FY15 and FY18.
According to the company, "Due to shortage of funds we could not acquire the raw materials but the management of the company tried to arrange the fund as well as the raw materials to restart the production in the factory. As per the rules & regulations we will inform the regulator before start [of] the production."
Last October, the Bangladesh Securities and Exchange Commission (BSEC) appointed an independent director in the company to dig up the problems hampering the business.
On Monday, the stock fell 3 per cent to Tk 23.40 per share.