The IPO subscription of Asiatic Laboratories -- the first initial public offering of 2023 -- will open on Monday (January 16), aiming to raise Tk 950 million from the capital market under the book-building method.
The subscription period will run up to January 22 and the general public can buy the primary shares of the drug maker at a record 60 per cent discount from 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.
Earlier in its consent letter, the BSEC set a condition that Asiatic Lab has to issue IPO shares to the general public at a 30 per cent discount from the cut-off price or Tk 20 each, whichever is lower.
The drug maker will issue about 34.55 million ordinary shares, with 25 per cent of them, or 8.84 million, kept reserved for eligible investors.
The remaining 25.91 million shares will be issued to the general public, including non-resident Bangladeshis, at Tk 20 each, as per the regulatory approval.
The unprecedented book-building price fixation effectively made the discount 60 per cent and the institutional investors have nothing to say as they themselves bought their stake at higher prices during the bidding, market insiders said.
The institutional investors are in a disadvantageous position, compared to their individual counterparts as they bought shares at a 150 per cent higher price through bidding.
From the IPO proceeds, Tk 580.50 million will be spent on 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.
Asiatic Laboratories will be the 35th listed company in the "pharmaceuticals and chemicals" category on the Dhaka Stock Exchange.
The drug maker received approval from the Bangladesh Securities and Exchange Commission (BSEC) on August 31, 2022 to explore the cut-off price.
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 is Tk 35.48 before the revaluation.
The company's revenue rose 21 per cent year-on-year to Tk 1.45 billion in the FY2020-21 while net profit jumped by 32 per cent to Tk 320.52 million during the period.
At present, the company's authroised capital is Tk 2.0 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 in 2021, which was participated by eligible investors, such as merchant bankers and portfolio managers, asset managers, stock dealers, foreign investors, and other institutional investors.
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