Rights issues of listed companies drop significantly

Mohammad Mufazzal | Published: July 03, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

The number of rights issues and the amount of fund raised by listed companies dropped significantly in the outgoing fiscal year (FY) compared to the previous FY, 2014-15.
A total of five companies raised an aggregate amount of fund worth above Tk 14.45 billion in the FY 2015-16 as against above Tk 3.13 billion raised by two companies through the rights issues in the FY 2014-15, according to information of Dhaka Stock Exchange (DSE) and the securities regulator.
A rights issue is a dividend of subscription rights to buy additional securities in a company made to the company's existing share holders.
The companies which issued rights shares in the FY 2015-15 are: Summit Alliance and the GPH Ispat.
The companies which raised capital through rights shares in the FY 2014-15 are: Delta Spinners, Midas Financing, Bangladesh Industrial Finance Company (BIFC), Investment Corporation of Bangladesh (ICB) and First Security Islami Bank.
Of the two companies which issued rights shares in the FY 2015-16, the Summit Alliance Port raised capital worth above Tk 515.28 million, including the premium of above Tk 171.76 million, at a ratio of 1R:5, one right share against five existing shares.
The GPH Ispat issued right shares at a ratio of 1R:5 and raised capital worth above Tk 2.61 billion, including the premium of above Tk 1.87 billion during the FY 2015-16. Â
Among the companies which raised capital through rights issues in the FY 2014-15, only the ICB issued rights shares at premium.
The ICB raised a capital worth above Tk 10.54 billion, including the premium of above Tk 8.43 billion by issuing rights shares at a ratio of 1R:2.
The Delta Spinners issued rights shares at a ratio of 2R:1 and raised above Tk 917.25 million.
The Midas Financing issued rights shares at a ratio of 1R:1 and raised fund worth above Tk 601.34 million.
The BIFC raised fund worth above Tk 335.59 billion by issuing rights shares at a ratio of 1R:2.
Another company First Security Islami Bank raised above Tk 2.05 billion by issuing rights shares at a ratio of 1R:2 during the FY 2014-15.
According to DSE information, six companies raised an aggregate amount of fund worth Tk 6.81 billion through rights issues during the FY 2013-14.
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