The bidding for eligible investors (EIs) to explore the cut-off price of shares of Lub-rref (Bangladesh) Ltd, a local lubricant producer, will begin tomorrow (Monday).
The Chittagong-based lubricant company's shares bidding through electronic subscription system (ESS) of the exchanges will be continued until 5:00pm on October 15, officials said.
Each eligible investor who intends to participate in the electronic bidding for the company's shares shall maintain a minimum investment of Tk 10 million only in listed securities as on the end of October 4 as per the (Public Issue) Rules, 2015.
The minimum tick size (minimum bidding value) for bidding shall be Tk 5.0 million which is in accordance with the BSEC consent letter to Lub-rref (Bangladesh) Limited, dated September 03, 2020.
The Central Depository Bangladesh Limited (CDBL) will send a report to the exchange regarding holding of EIs in listed securities and the exchange will ensure the compliance in this regard.
The stock market regulator allowed the lubricant company to explore its cut-off price on August 20 - a requirement for going public under the book building method.
The local lubricant company will raise a capital worth Tk 1.50 billion from the capital market under the book-building method.
The IPO proceeds will be used for expanding its existing refinery plant with an aim to meet the growing demand for lubricants from both home and abroad and repay some expensive bank loans.
To finance the expansion, around Tk 980 million will be funded through IPO proceeds, which would enable the company to capture 20 per cent market share, from the existing 8.0 per cent, company officials said.
Luf-rref, whose products are branded as BNO Lubricants, recently introduced Nynas technology based transformer oil and nano technology based lubricants to minimise carbon emissions and ensure engine longevity.
The company is also set to invest Tk 4.0 billion to establish the country's first state-of-the-art base oil refinery with an aim to meet the growing demand for lubricants, Mohammed Yousuf, managing director of Lub-rref (Bangladesh) said recently.
The sector has huge potential for growth in Bangladesh as the local lubricant market is mostly import based.
"Around 85 per cent of total demand is supplied through imports and foreign brands dominate the local market. Lub-rref wants to break the domination of foreign brands and make Bangladesh self-reliant," said Mr Yousuf.
Of the total investment, Tk 1.20 billion would come from equities and return earnings while the rest will be financed through foreign loans, he added.
As of the fiscal year that ended on June 30, 2019, the company's earnings per share stood at Tk 2.08, while the five years' weighted average EPS was 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 with the revaluation surplus of assets.
NRB Equity Management is working as the issue manager to company's IPO process.
Incorporated in 2001, the company commercially launched its manufacturing plant in 2006.
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