After a dismal performance in 2023, the primary market may get a boost this year as two companies -- Best Holdings and NRB Bank -- are going to raise funds through initial public offering (IPO) in the first month of the New Year.
Best Holdings will raise Tk 3.50 billion under the book-building method while NRB Bank will raise Tk 1 billion under the fixed price method.
In 2023, fund raising from the primary market through IPOs fell sharply to Tk 2.68 billion, the lowest in six years.
Best Holdings
The subscription for the IPO of Best Holdings will open on January 14 and continue until January 18, according to its IPO prospectus.
The general investors can apply for Best Holdings IPO shares without any value restrictions, as the regulator has relaxed the standard of Tk 10,000 cap typically imposed for an investor in IPO applications.
Earlier, the cut-off price of its IPO shares was fixed at Tk 35 through electronic bidding between November 20 and 23 -- a requirement for going public under the book-building method.
The general investors, including non-resident Bangladeshis, however, will get IPO shares at a 30 per cent discount on the cut-off price, meaning they will be able to buy at Tk 24 each.
The company will issue more than 125.05 million ordinary shares in total where 26.57 million are reserved for eligible investors at their bidding price at Tk 35 each.
More than 18.75 million shares will be issued to its employees while the general investors, including non-resident Bangladeshis, will get 79.72 million IPO shares.
Of the IPO proceeds, the company will use Tk 1.76 billion for building and other civil works, Tk 1.15 billion for repayment of existing liabilities, Tk 450 million of local machinery and equipment while remaining for IPO expenses.
According to the audited financial report for the year ended in June this year, its earnings per share stood at Tk 1.24 while the year-weighted average EPS for the last five years was Tk 0.95.
Its net asset value per share was Tk 32.26 without revaluation surplus and Tk 56.34 per share with revaluation reserve.
Shanta Equity and ICB Capital Management are working as the issue manager of the company's IPO process.
Incorporated in 2006, Best Holdings has a paid-up capital of Tk 9.25 billion. It has two subsidiaries -- Best Hotels and Dhamshur Economic Zone.
NRB Bank
The IPO subscription of NRB Bank will open January 28 and continue until February 1, which will raise Tk 1 billion from the primary market.
NRB Bank, a fourth-generation private commercial bank, received regulatory approval from the BSEC on November 9 last year for raising the said amount.
The private sector lender will issue 100 million ordinary shares through the fixed price method. The IPO proceeds will be used to invest in government securities and secondary stock markets.
The bank has reported net asset value per share of Tk 12.72 (without revaluation) and earnings per share (EPS) of Tk 0.27 for a period of nine months through September this year. The weighted average of the EPS for the last five years stood at Tk 0.72.
UCB Investment and Shahjalal Equity Management are working as issue managers for the IPO of the NRB Bank.
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