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IPO lottery draw of Lub-rref today

Lubricant producer's IPO oversubscribed by 12.32 times

FE REPORT | February 23, 2021 00:00:00

Lub-rref (Bangladesh), a local lubricant producer, is set to hold initial public offering (IPO) lottery draw today (Tuesday) to allocate 45.24 million ordinary shares.

The IPO lottery draw will be held at 11:00am at Hotel Intercontinental Dhaka, officials said.

After the lottery, result will be published on the websites of the company, issue manager, the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE).

The Lub-rref, which products are branded as BNO Lubricants, has received a good response from the general investors for its IPO shares which raised Tk 1.50 billion under the book-building method.

The company's IPO subscription was held between January 26 and February 1, this year.

The company received a total subscription Tk 7.52 billion from general investors against public issue of IPO for general investors of Tk 610 million, which is oversubscribed by 12.32 times, according to the final status.

Total subscription received from Resident Bangladeshis is Tk 6.44 billion, affected small investors Tk 529 million and non-resident Bangladeshis Tk 555 million.

The stock market regulator - Bangladesh Securities and Exchange Commission (BSEC) -- approved the company's IPO proposal on November 18, last year.

Earlier the company completed electronic bidding and explored its cut- off price of shares - a requirement for going public under the book building method.

The cut-off price of Lub-rref shares was fixed at Tk 30 each through electronic bidding by eligible investors held between October 12 and October 15, 2020.

Of the total 45.24 million ordinary shares, 22.62 million shares are reserved for eligible investors (EIs) at their own bid price.

The general investors, including non-resident Bangladeshis, will get 22.62 million ordinary shares at Tk 27 each, a 10 per cent discount on the cut-off price.

The IPO proceeds will be used for expanding its existing refinery plat with an aim to meet the growing demand for lubricants from both home and abroad and repay some expensive bank loans.

Alongside the construction of a new base oil refinery at the Julda Industrial Theme Park in Chattogram, the company will expand its present factory and fit it with the means to produce a higher grade of lubricant products.

To finance the expansion, around Tk 980 million will be funded through Lub-rref's IPO proceeds.

As of the fiscal year that ended on June 30, 2019, the company earned Tk 2.08 against each of its shares, while the five years' average earnings per share were Tk 2.23.

The net asset value per share of the company, with a Tk 1.0 billion paid- up capital was Tk 31.92 a year ago, while NAV would be Tk 25.96 without adding the revaluation surplus of assets.

NRB Equity Management is working as the issue manager for the company's IPO process.

Incorporated in 2001, the company commercially launched its manufacturing plant in 2006. The Lub-rref (Bangladesh) imports base oil and additives to blend luboil of various formulations to cater to the needs of automotives and industries.

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