The bidding for discovering cut-off price for Runner Automobiles IPO shares under the book-building method will begin on Monday (September 10).
The bidding by the eligible institutional investors through the uniform and integrated electronic subscription system of the stock exchanges will be continued till September 13, officials said.
Institutional bidding is a must for a company which intends to go public using the book building method.
The Bangladesh Securities and Exchange Commission (BSEC) allowed the company to conduct bidding for discovering IPO (initial public offering) share price on July 10.
Runner Automobiles, which held road show in October 2016, will raise a capital worth Tk 1.0 billion from the capital market using the book-building method.
Book building is a process through which an issuer attempts to determine the price to offer for its security based on demand from institutional investors.
The eligible investors, who will not participate in the bidding, will not be able to participate in the offer period, said a DSE official.
After discovering the cut-off price, the shares will be opened for the public subscription for the IPO participants.
The institutional investors will purchase shares of a company at a cut-off price determined through the electronic bidding. And general investors will get the IPO shares at 10 per cent discount on the cut-off price.
Runner Automobiles will use the IPO proceeds for research and development, purchase of machinery, repaying bank loans and meeting expenditure for the IPO process.
Runner Automobiles will utilise the IPO fund for research and development works, purchasing machineries, repaying bank loans and bearing the IPO expense.
According to the financial statement for the year ended on June 30, 2017, the company's net asset value (NAV) per share is Tk 55.70, with revaluation reserve. The value is Tk 41.94 without revaluation reserve.
And, the weighted average earning per share (EPS) of the company is Tk 3.31.
IDLC Investments is working as the issue manager of the IPO.
Incorporated in 2000, the Runner Automobiles is a motorcycle manufacturer in Bangladesh. Currently, the company manufactures 12 different types of motorcycles ranging between 80 CC and 150 CC.
Recently, the government has allowed the Runner Automobiles to import raw materials and components to make motorcycles of over 165cc to 500cc, widening export opportunities for the local company.
The ministry of commerce gave its consent to import parts and raw materials on August 30 last.
Under a move to diversify the export basket, Runner has set a target of exporting 165cc to 500cc motorcycles to Bhutan, Myanmar, and north-eastern states of India, Africa and the Middle East.
