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Index Agro's cut-off price fixed at Tk 62 each

The company to raise Tk 500m under book-building method

FE REPORT | November 09, 2020 00:00:00

The cut-off price of Index Agro Industries shares has been fixed at Tk 62 each through electronic bidding by eligible investors.

The eligible investors took part in the price discovery of the company's shares by bidding for 72 hours from November 1 to November 4, as per the book building method.

During the period, 191 eligible investors (EIs) offered different prices to buy the company's shares. Among them, most bids were Tk 61 and Tk 51 each, according to the data from the electronic subscription system (ESS) disclosed on Sunday.

A total of 16 bidders offered Tk 61 each and 12 bidders offered Tk 51 each to buy the company's shares.

The highest bidding price was Tk 100 and the lowest bidding price was Tk 11 each, according to the ESS data.

Earlier on September 10, the stock market regulator, Bangladesh Securities and Exchange Commission (BSEC), allowed the Index Agro Industries to explore its cut-off price - a requirement for going public under the book building method.

As per the regulatory approval, the company is in the process of raising a capital worth Tk 500 million from the capital market under the book-building method.

According to the book building method, the eligible investors will buy 50 per cent or worth Tk 250 million shares at the cut-off price which has been set at Tk 62 each through electronic bidding.

The remaining 50 per cent shares will be opened to the IPO participants, including general investors and non-resident Bangladeshis, at a 10 per cent discount on the cut-off price.

The company will use the IPO proceeds for the purpose of constructing buildings, purchasing machinery and bearing the IPO related expenses.

According to the financial statement for the year ended on June 30, 2019, the company's net asset value (NAV) per share stood at Tk 45.03 (with revaluation reserve) while the earnings per share (EPS) was Tk 7.07.

The company also reported the weighted average EPS of Tk 5.60 based on financials of last five years.

AFC Capital Ltd and EBL Investments Ltd are jointly working as issue managers for the company's IPO process.

Incorporated in 2000, Index Agro Industries commenced operations with a poultry hatching and breeder facility to cater to the growing demand of quality pullets for the promising local poultry industry.

The principal activities of the company are manufacturing and marketing of poultry feed, fish feed and producing day-old chicks (broiler & layer).

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