The IPO (initial public offering) subscription of Runner Automobiles will open today (Thursday) and will continue till February 10.
Some 5.60 million shares (40 per cent) will be issued to general investors through IPO (initial public offering) subscription at a price of Tk 67 each.
Under the book building method, the Runner Automobiles will raise a capital worth Tk 1.0 billion issuing 13.93 million ordinary shares.
As per the regulatory approval, the company will use the IPO proceeds for research and development, purchase of machinery, repaying bank loans and meeting expenditure for the IPO process.
The book-building method is a process through which an issuer attempts to determine the price of a share based on the demand from institutional investors.
The cut-off price of the shares of Runner Automobiles earlier was fixed at Tk 75 each as discovered by eligible investors (EIs) through electronic bidding under the book-building method.
Of 13.93 million shares, more than 8.33 million shares (60 per cent) will be issued to the EIs at the cut-off price of Tk 75 each.
The remaining 5.60 million shares (40 per cent) will be issued to general investors through IPO at Tk 67 each, 10 per cent discount on the cut-off price.
According to financial statements of the motorcycle maker for the year ending on June 30, 2017, the company's net asset value (NAV with revaluation) per share stood at Tk 55.70. The NAV without revaluation was Tk 41.94.
And the weighted average of the EPS (earnings per share) is Tk 3.31. IDLC Investments Limited is the issue manager of the IPO of Runner Automobiles.
Runner Automobiles started its journey in 2000. The company manufactures 12 different types of motorcycles ranging between 80 CC and 150 CC. It has 15 per cent market share in the country's auto industry. The company also sells three-wheelers and four-wheelers of Bajaj Auto.
The company has also started exporting motorcycles to Nepal and Bhutan.
