Number of IPOs drop in FY 16

Mohammad Mufazzal | Published: June 30, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

Some 10 companies and one mutual fund (MF) have raised an aggregate amount of above Tk 8.58 billion through IPOs in the outgoing fiscal year (FY), 2015-16, as against above Tk 13.06 billion raised by 15 companies and one MF in the previous FY, 2014-15.
The issue managers said the number of Initial Public Offerings (IPOs) declined in FY 16 compared to the previous FY due to sluggish market trend as well as revision in public issue rules.
According to the information of the Dhaka Stock Exchange (DSE), a total of 10 companies and one MF have raised capital worth above Tk 8.58 billion by floating IPOs in FY 2015-16.
Of the total fund, raised by the 10 companies, above Tk 5.14 billion came as premium of only five companies.
"I think the number of IPOs declined in FY 16 due to the regulator's cautious attitude, adopted considering the investors' interest," said Md. Moniruzzaman, managing director of IDLC Investment.
He said the companies having good fundamentals should be allowed to enter into the market to increase its depth.
Another issue manager said the revised public issue rules compelled many issuer companies to revise their IPO proposals. That is why the number of IPOs came down in FY 16.
In December 2015, the securities regulator made the use of book-building method mandatory for the companies willing to offer their primary shares with premium.
Later, many companies, which submitted IPO proposals to go public with premium under the fixed price method, were asked to revise their proposals for going public under book-building method.Â Â
The companies which went public in FY 2015-16 are: KDS Accessories, Simtex Industries, Regent Textile Mills, Information Technology Consultant, SEML Lecture Equity Management, Dragon Sweater and Spinning, Doreen Power Generations and Systems, Bangladesh National Insurance Company, Evince Textiles and the ACME Laboratories.
The only one MF which went public in the fiscal is Vanguard AML BD Finance MF.
Among the companies, KDS Accessories raised above Tk 240 million, including Tk 120 million premium, Simtex Industries Tk 600 million, including Tk 300 million premium, Regent Textile Mills Tk 1.25 billion, including Tk 750 million premium, Information Technology Consultant Tk 120 million, and SEML Lecture Equity Management Tk 250 million.
Besides, Dragon Sweater and Spinning raised Tk 400 million, Doreen Power Generations and Systems Tk 580 million, including Tk 380 million premium, Bangladesh National Insurance Company Tk 177 million, Evince Textiles Tk 170 million and the ACME Laboratories above Tk 4.09 billion, including above Tk 3.95 billion premium.
After listing with the bourses, the market prices of these companies declined 19 to 34 per cent during January-June period 2016.
Vanguard AML BD Finance MF raised 700 million through IPO. The units of the MF are presently being traded below the face value of Tk 10 each.
In FY 2014-15, a total of 15 companies and one MF raised capital worth above Tk 13.06 billion by floating IPOs.
Of the total fund, above Tk 7.93 came from the premium of 10 companies.
Of the companies which went public in the FY, Saif Powertec raised Tk 360 million, including Tk 240 million premium, Ratanpur Steel Re-Rolling Tk 1.0 billion, including Tk 750 million premium, Western Marin Shipyard above Tk 1.57 billion, including above Tk 1.12 billion premium, Khan Brothers PP Woven Bag Industries Tk 200 million, Hamid Fabrics Tk 1.05 billion, including Tk 750 million premium, National Feed Mills Tk 180 million, and C & A Textile Tk 450 million.
Besides, IFAD Autos raised Tk 637.50 million, including Tk 425 million premium,Â Shasha Denims Tk 1.75 billion, including Tk 1.25 billion premium, Zaheen Spinning Tk 120 million, United Power Generation above Tk 2.37 billion, including Tk 2.04 billion premium, Bangladesh Steel Re-Rolling Mills Tk 612.50 million, including Tk 437.50 million premium, Tosrifa Industries above Tk 638.72 million, including above Tk 393.05 million premium, Olympic Accessories Tk 200 million, and Aman Feeds Tk 1.32 billion, including Tk 520 million premium.
The only one MF - Asian Tiger Sandhani Life Growth Fund - raised Tk 600 million in FY 2014-15.
Among the companies and MFs which went public in the FY, the shares of C & A Textile and the units of Asian Tiger Sandhani Life Growth Fund are presently being traded below the face value of Tk 10 each.
The market prices of other companies declined eight to 34 per cent as of June 28, 2016.
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