New IPOs Activities So Far For This Year
The current year has turned out to be a mixed year so far for the IPOís launched in Bangladesh over the past five and a half months. An aggregate of seven public issues have so far been thrown open for the public for subscription in the current year. While at least three of these issues have been offered at a premium, the other four IPOís have come out so far at par. Out of the seven IPOs so far floated in the primary market till today in the current year, four of these issues have come out from new companies including Salvo Chemical Industries, M.I. Cement Factory, Baraktullah Electro Dynamics Ltd and MJL Bangladesh Ltd.
While two of these issues offered by companies- MJL Bangladesh Ltd and M.I. Cement Factory have tried their hands out in raising funds through the relatively new method of book building method for pricing of new issues, the other five issues have so have come out on a fixed pricing basis. In fact, the SECís directive to defer offering fresh approvals after January this year, to companies seeking to come out with book building method, has left at least 10 more companies, lined up with fresh IPOís in a watchful mode. This is because ever since the approval to allow book building method for pricing of new issues, the SEC has come out with some observations suggesting that the method has left scope with the companies to carry out manipulation in the share price fixing, soon after the issue and listing.
In terms of prices commanded so far by the new issues which have hit the markets so far in the current year, M.J.L Bangladesh Ltd, Baraktullah Electro Dynamics Ltd and M.I. Cement Factory have so far come out this year with their IPOs at a strong premium. While Baraktullah Electro Dynamics Ltd issue was offered at a fixed pricing basis, the other companies came out with a book building method, which was initially tried out in Bangladesh only last year by a couple of companies.
Amongst the IPOís which have already sailed through in 2011, MJL Bangladesh Ltd has turned out to be the company which raised the maximum funds worth Taka 6,096,000,000. The issue, which came out on a book building method of pricing the issue pricing, managed to command a premium of Taka 142.40 per share for the 40,000,000 equity shares it floated in primary market. The primary reason why the company managed comfortably to command a handsome premium of Taka 142.40 per share for 40 million shares it offered, was the brand name of Mobil, which is a renowned multinational company in the lubricants and petroleum segment.
MJL Bangladesh Ltd is the official patent user to extract lubricants and oils and distribute the same in the territory of Bangladesh.
M.I. Cement Factory Ltd was another mega public issue floated in January this year, as the company managed to raise funds out of 30000000 equity shares of TK 10 at a premium of TK 101.60 at an issue price of TK 111.60. The issue sought to raise TK 3348000000 through the IPO, of which 20 per cent were reserved for the institutional investors.
Amongst the IPOís now lined up for later this year once some uncertainties on pricing issues are cleared, Ananda Shipyard is scheduled to raise funds through fresh issue of 30 million equity shares. The company is primarily involved in the shipbuilding activity, and usually carries a large backlog of order book.
Far East Knitting & Dyeing is another company which is slated to offer 30 million equity shares. The company is eyeing a premium of Taka 40 per share, to raise an aggregate of Taka 1,500,000,000.
Apart from these issues scheduled later this year which are still waiting in wings, the other companies which are likely to raise funds through fresh IPOís later this year include companies like GMG Airlines Ltd, Cotton Mills Ltd, Orion Pharma and few others. However, the timing of all the proposed issues would depend largely on how the markets behave later this year.