Asiatic Laboratories is all set to float the first IPO of 2023, giving individual investors an opportunity to buy its primary shares at a 60 per cent discount to the price fixed for eligible investors.
The cut-off price was set at Tk 50 through bids by eligible investors, a requirement for the listing under the book-building method. So, individual investors will be able to purchase shares at Tk 20 each through the electronic subscription system of the stock exchanges.
The IPO subscription will open on January 16 to continue until January 22, when the drug manufacturer targets to raise Tk 950 million.
Having achieved a 55.3 per cent profit growth in the five years through June 2021, the company considered making an initial public offering to expand business.
From the IPO proceeds, Tk 580.50 million will be spent on the acquisition and installation of machinery, Tk 61.47 million on the construction of a factory building, and Tk 280 million on the repayment of bank loans, alongside the IPO expenses.
Asiatic Laboratories will be the 35th listed company under the "pharmaceuticals and chemicals" category in the Dhaka Stock Exchange.
The drug maker received approval from the Bangladesh Securities and Exchange Commission (BSEC) on August 31 to explore the cut-off price.
Accordingly, the price was fixed through electronic bidding by eligible investors between October 10 and October 13.
During the time, 221 eligible investors offered between Tk 20 and Tk 50 to buy a share of the Asiatic. Among them, 161 bidders offered the highest price -- Tk 50.
Asiatic Laboratories will issue about 34.55 million ordinary shares, with 8.84 million reserved for eligible investors for Tk 50 each.
The remaining 25.91 million shares will be issued to the general public, including non-resident Bangladeshis. NRBs will also get shares at Tk 20 each.
According to the rules, the company has to issue IPO shares to individual investors, including NRBs, at a 30 per cent discount to the cut-off price or at Tk 20 each, whichever is lower.
As per the audited financial statements for the year ended in June 2021, the company's net asset value (NAV) per share stood at Tk 56.61 after a revaluation of assets, while the value was Tk 35.48 before the revaluation.
At present, the company's authorised capital is Tk 2 billion, paid-up capital Tk 878.48 million and the total number of securities 87.85 million.
Shahjalal Equity Management is working as the issue manager for the IPO.
Asiatic Laboratories held a roadshow on October 24 last year, which was participated by eligible investors, such as merchant bankers and portfolio managers, asset managers, stock dealers, foreign investors, and other institutional investors.
A roadshow is a requirement under the book-building regulation, when an issuer attempts to determine the price to offer for its security based on the demand of institutional investors.
The company came into operation in 1998 to manufacture, sell and distribute pharmaceutical products (human drugs).
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