Techno Drugs makes share trading debut on Sunday
FE REPORT | Friday, 12 July 2024
Techno Drugs Ltd is set to make its share trading debut on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) Sunday under the 'N' category.
It will become the 34th listed firm in the "pharmaceuticals & chemicals" sector on the prime bourse, a sector that commands approximately 16.5 per cent of the DSE's total market capitalization, second only to banking.
The company, which obtained regulatory approval from the Bangladesh Securities and Exchange Commission (BSEC) on March 7, successfully raised Tk 1 billion through the book-building method in the primary market. These funds will be allocated towards business expansion and loan repayment initiatives.
Techno Drugs plans to invest Tk 270 million in new machinery, allocate Tk 250 million for expanding its existing factory in Narsingdi, repay Tk 300 million in bank loans, and establish a new production unit in Gazipur at a cost of Tk 150 million. The remainder of the proceeds will cover IPO expenses.
Institutional investors determined the cut-off price of Techno Drugs' shares at Tk 34 during electronic bidding from April 21 to April 24, a prerequisite for IPOs under the book-building method. General investors, including non-resident Bangladeshis, were allotted shares at a 30 per cent discount on the cut-off price, at Tk 24 each.
The IPO subscription, held from June 10 to 13, was oversubscribed by 24.64 times, as it received Tk 24.87 billion against IPO shares valued at Tk 1.0 billion, according to DSE.
General investors received 11 IPO shares of Techno Drugs each, while non-resident Bangladeshis received 20 shares against an application of Tk 10,000 under the pro-rata basis.
In the fiscal year ending FY23, Techno Drugs experienced a 45 per cent decline in sales to Tk 2.73 billion, alongside a 59 per cent decrease in net profit to Tk 195.5 million.
Consequently, its earnings per share (EPS) dropped to Tk 2.08 for FY '23 from Tk 5.10 the previous year.
As of June 2023, the company reported a net asset value (NAV) per share of Tk 27.78 with a revaluation surplus, and Tk 22.57 per share without the surplus.
Imperial Capital and EBL Investments are managing the company's IPO process.
Established in 2009, the drug maker produces human and veterinary medicines and sells them both at home and abroad.
Techno Drugs also claims that it pioneered the production of oncology medicines in Bangladesh.