IFAD Autos Limited (IAL), an auto mobile dealer, made a flying trade debut Thursday on the prime bourse and the port city bourse by becoming the top gainers and turnover leaders although the company's first quarter net profit declined.
Each share of the company closed at Tk 67.7 on the Dhaka Stock Exchange (DSE), registering an increase of 126 per cent from the offer price of Tk 30, according to the DSE website.
Some 11.68 million shares worth Tk 740.09 million were exchanged on the DSE trading floor, which is around 28.35 per cent of the total turnover of Tk 2.61 billion.
At the Chittagong Stock Exchange (CSE) - each share of the company traded between Tk 47 to Tk 68.5 before closing at Tk 66.9, which was 123 per cent increased from its issue price of Tk 30. A total of 2.86 million shares changed with a value of Tk 177.95 million.
"A newly listed security is sometimes considered as an instrument for short-term speculation, and many investors want to bet on the shares for short-term gain," said an analyst. "So, it created hype among the investors on the first day of trading".
IFAD Autos is the 29th listed company in the engineering sector that accounts for more than 4.0 per cent of the total market capitalisation on the premier bourse.
The public subscription of the company was took place between November 23 to 27, 2014 for resident Bangladeshi and it was continued till December 6 for non-resident Bangladeshi (NRBs).
The automobile dealer floated 21.25 million ordinary shares of Tk 10 each at an offer price of Tk 30, including Tk 20 as premium and raised a fund worth Tk 637.50 million from the public.
Initial Public Offering (IPO) lottery of IFAD Autos was held on December 24, 2014. IPO subscription of the company was oversubscribed around 16 times as it received over Tk 10.23 billion against public issue of Tk 637.50 million.
However, the company's net profit fell 46.22 per cent year-on-year to Tk 54.92 million in July-September period 2014, with Tk 0.48 in earnings per share (EPS) and NAV per share Tk 42.17, considering Post-IPO 115,000,000 number of shares, according to DSE website.
The proceeds from the IPO is being used for capital expenditure for assembling & body building units, bank loan repayment and IPO expenses.
Banco Finance and Investment and Alpha Capital Management jointly managed the initial public offering of IFAD Autos.
The securities regulator - Bangladesh Securities & Exchange Commission (BSEC) approved the IPO proposal of IFAD Autos on September 18, 2014.
The automobile dealers' main activity is importing, marketing and body building of different models of Ashok Leyland's vehicles, the second largest commercial vehicles maker in India, for assembly in Bangladesh through its own marketing staffs, dealers and selling agents in different districts across Bangladesh.
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