The share prices of 20 listed companies went down below their respective offer prices despite many of the companies witnessed significant price hike after the listing.
The share prices of the companies declined up to 63 per cent from the offer prices as of Sunday.
Experts said the share prices of many companies failed to sustain as their fundamentals 'did not support' the offer prices.
They also blamed the unjustified demand of shares and the market volatility behind the unsustainable price hikes of shares.
Of 21 companies, 14 went public with premiums, while the remaining six were listed with face value of Tk 10 each.
Four companies have already been placed in 'Z' category and another three were shifted in 'B' category.
The former chairman of the securities regulator Dr. AB Mirza Azizul Islam said after issuance of an IPO (initial public offering) many investors create demand of shares without justifying the companies' fundamentals.
"That's why the company's share price rises abnormally. After few months, the price fails to sustain as the company's fundamentals do not support the prices," said Mr. Islam, also a former advisor to the caretaker government.
Hamid Fabrics was listed in 2014 with an offer price of Tk 35, including a premium of Tk 25. The company's share price rose 60.28 per cent from its offer price and closed at Tk 56.1 on the debut trading day.
The company reported its EPS of Tk 5.58 for 2014. Later, the EPS declined significantly for 2015 and the trend continued till 2017. The EPS was Tk 1.80 in 2015, Tk 1.01 in 2016, Tk 0.79 in 2017 and Tk 2.01 in 2018.
Keeping pace with the down trend of the EPS, the company's share price declined gradually and presently the price is below the offer price. On Sunday, the company's share price closed at Tk 23.60 each, which was 32.57 per cent less than the offer price.
Like Hamid Fabrics, the share prices of another 19 companies declined gradually after their listing with the stock exchanges.
The Peninsula Chittagong was listed with an offer price Tk 30 per share and the company's price closed at Tk 28.20 on Sunday. During the year of listing, the company reported it's EPS of Tk 2.70. Later, the EPS gradually declined significantly in 2015, 2016, and 2017. The EPS was Tk 1.27 in 2015, 0.84 in 2016 and Tk .53 in 2017. The EPS, however, rose to Tk 0.62 in 2018.
GBB Power went public with an offer price of Tk 40, and later the price declined gradually and on Sunday closed at Tk 10.70 which was 73 per cent less than the offer price.
After listing, the share price of Zahintex Industries declined 59.20 per cent from the offer price of Tk 25 and closed at Tk 10.20 each on Sunday.
Of other companies, the market price of GSP Finance Company declined 19.20 per cent, Argon Denims 23.42 per cent, Orion Pharmaceuticals 38.83 per cent, Appollo Ispat Complex 63.63 per cent, Western Marine Shipyard 42.28 per cent, Tosrifa Industries 19.61 per cent, Regent Textile Mills 30.80 per cent from their respective offer prices.
Appollo Ispat complex reported its EPS Tk 1.84 for 2014. Later, the EPS declined Tk 1.77 in 2015. The EPS was Tk 2.34 for 2016, and Tk 1.35 for 2017. The EPS declined 96 per cent to close at Tk 0.05 for 2018 compared to previous year.
Of other companies, Mobil Jamuna Lubricants went public with an offer price of Tk 115 each and on Sunday the company's share price closed at Tk 100.30 which was 12.78 per cent less than the offer price.
MI Cement Factory went public with an offer price of Tk 111.60 and the share price closed at Tk 74.60 each on Sunday.
After listing, the Mobil Jamuna Lubricants displayed a steady growth in EPS. The growth of MI Cement was almost stable. Nevertheless, the share prices of these two companies went down below their offer prices.
Mirza Aziz, a former chairman of the securities regulator said the share prices of some companies went down below offer price due to ups and downs of the capital market.
Baraka Power, formerly known as Barkotullah Electro Dynamics, went public with an offer price of Tk 60. The company's share price closed at Tk 31.10 on Sunday.
Unique Hotel & Resorts went public with an offer price of Tk 75 and the company's share price closed at Tk 53.80 each on Sunday.
The companies which offloaded shares at face value of Tk 10 each are Familytex (BD), Fareast Finance & Investment, Tung Hai Knitting & Dyeing, C & A Textile, and Generation Next Fashions.
The share price of Familytex (BD) closed at Tk 4.90, Fareast Finance & Investment Tk 5.60, Tung Hai Knitting & Dyeing 4.50, C & A Textile Tk 4.0, and Generation Next Fashions Tk 6.80 on Sunday.
Of these companies, C & A Textile, Tung Hai Knitting & Dyeing, and Fareast Finance & Investment have already been placed in 'Z' category.
The share price of United Airways (BD), presently a 'Z' category company, closed at Tk 2.80 each on Sunday on the premier bourse. The company's sponsor-directors presently are holding only 4.16 per cent as of January 31, 2019.
