The securities regulator has allowed Delta Hospital Ltd to determine its cut-off price through eligible investors' bidding - a requirement for going public under the book building method.
The approval came at a meeting at the office of Bangladesh Securities and Exchange Commission (BSEC) on Tuesday chaired by its chairman Dr. M Khairul Hossain.
The Delta Hospital will float IPO (initial public offering) shares under the book building method to raise a capital worth Tk 500 million, according to the BSEC approval.
It is the first company after the latest revision of the public issue rules approved by BSEC on July 16, 2019.
The BSEC also set a condition that each eligible investors who will take part in the electronic bidding for discovering its cut-off price, have to invest minimum Tk 10 million for five days from starting of bidding in the listed securities.
Under the revised book-building method, eligible investors' (including mutual funds) quota was reduced to 50 per cent from 60 per cent while the general investors' quota (including NRBs) has been enhanced to 50 per cent from 40 per cent.
As per the revised public issue rules, eligible investors and mutual funds are allowed to purchase 40 per cent and 10 per cent shares respectively at the cut-off price.
The general public and non-resident Bangladeshis (NRBs) are allowed to purchase 40 per cent and 10 per cent shares respectively at 10 per cent discount on the cut-off price.
The company will utilise the IPO proceeds for buying capital machinery, repay bank loans and bear the IPO expenses.
As per the financial statement for the year ended on June 30, 2019, the net asset value (NAV) per share was Tk 45.84 with asset revaluation and Tk 16.62 without asset revaluation. The basic earnings per share (EPS) stood at Tk 2.10 and the weighted average EPS stood at Tk 1.91.
Prime Finance Capital Management Ltd is the issue manager and ICB Capital Management Ltd will act as the registrar of the company's IPO.
The Delta Hospital held a road show in early October, 2016 for raising fund from the capital market through book-building method.
On Tuesday's meeting, the securities regulator also approved the Runner Automobile's proposal of revision of IPO proceeds of Tk 630 million.
However, the BSEC imposed bar on issuance of Runner Automobile's bonus shares until full utilisation of the revised IPO proceeds.
The Runner Automobiles, a company of Runner Group, raised a fund worth Tk 1.0 billion issuing 13.93 million ordinary shares under the book building method in January, 2019.
The securities regulator has also approved the draft prospectus of 1st ACACIA SRIM SME Growth Unit Fund.
The fund is open-ended and the initial size of the Growth Fund will be Tk 100 million.
The sponsor of the fund will contribute Tk 10 million while the remaining Tk 90 million will be collected from general investors through sales of fund units.
The face value of each unit of the fund has been fixed at Tk 10.
The ACACIA SR Investment Management Ltd is working as asset manager of the unit fund which is also the sponsor of the fund.
Sentinel Trustee & Custodial Services Ltd is the trustee and custodian of the growth fund.
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