Dominage Steel Building Systems made a flying trading debut on Wednesday as its shares price jumped 50 per cent -- the highest allowable limit, riding on investors' 'irrational hype' over the new issue.
The steel building maker's share closed at Tk 15 each on the Dhaka Stock Exchange (DSE), soaring 50 per cent, the highest allowable limit on its issue price of Tk 10 each.
On the Chittagong Stock Exchange (CSE), the company's share price also rose 50 per cent to close at Tk 15 each, after hitting the highest allowable limit.
Market analysts said the investors showed their appetite for the new issue amid short-term speculation. So, it created an 'irrational hype' among investors on the debut trading day.
The company's trading was halted within few minutes of transactionas investors rushed to buy its shares. But no sellers were seen on the trading board.
The price of the shares of the company could not go up further despite high demand from investors due to the imposition of a new circuit breaker on shares which made debut, said a leading broker.
As per the new rules, price limit of a new company will remain open 50 per cent on issue price on debut day and the following day, price limit will remain open 50 per cent on closing price of debut trading.
The Dominage Steel raised Tk 300 million from the capital market by issuing 30 million ordinary shares with an offer price of Tk 10 each using the fixed price method.
The company will utilise the IPO proceeds for acquisition of new plant & machinery (55.77 per cent), building and other construction (30.14 per cent), electrical installation (7.56 per cent) and bearing the IPO related expenses (6.53 per cent).
As per audited annual financial statements, profit after tax was Tk 92.27 million for the year ended on 30 June 2020 against profit after tax of Tk 96.72 million for the year ended on 30 June 2019.
The company's post-IPO basic earnings per share (EPS) was Tk 0.97 for the year ended on 30 June 2020. Pre-IPO net asset value (NAV) per share is Tk 21.23 as on 30 June 2020 and the same is Tk 17.68 (considering Post-IPO paid up shares).
The newly listed company has also recommended 2.0 per cent cash and 8.0 per cent stock dividend for the year ended on June 30, 2020. Shahjalal Equity Management is working as the issuer manager of the company's IPO processes.
The company's paid-up capital is Tk 950 million, authorised capital is Tk 1.0 billion and the total number of securities is 95 million.
The sponsor-directors own 30.20 per cent stake in the company while institutional investors own 24.50 per cent and the general public 45.30 per cent as on June 30, 2020.
Incorporated in 2007, Dominage Steel is engaged in manufacture of various pre-engineered steel buildings according to the designs and providing full-fledged architectural and consultancy services.
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