Walton Hi-Tech Industries has made a proposal of issuing IPO shares with 10 per cent additional discount on stipulated price considering the interest of the capital market and small investors.
The company submitted its proposal to the Bangladesh Securities and Exchange Commission (BSEC) on Sunday.
As per the proposal, general investors will get IPO (initial Public Offering) shares at Tk 252 each instead of Tk 283.50 each earlier determined through electronic bidding.
"The company's board of directors has taken the decision of offering 10 per cent additional discount considering the market situation and interest of small investors," said Partho Protim Das, company secretary at Walton Hi-Tech Industries.
Walton Hi-Tech Industries earlier completed its IPO road show and bidding as part of the process of raising a capital worth Tk 1.0 billion under the book building method.
The company is now awaiting the regulatory approval to float IPO for general investors.
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.
As per the method, the eligible investors will get 50 per cent shares at the cut-off price through electronic bidding.
The remaining 50 per cent shares will remain open for the IPO participants, including affected small investors and non-resident Bangladeshis, at a 10 per cent discount on the cut-off price.
Due to the company's latest offer of 10 per cent additional discount, IPO seekers will get shares at Tk 252 each subject to the approval from the securities regulator.
As per previous plan, the company was supposed to issue above 1.37 million shares through IPO.
Now, the company will have to issue additional 167,676 shares through IPO to raise an aggregate amount of capital worth Tk 1.0 billion.
Asked, a BSEC official said a company can offer additional discount on its stipulated share price.
"The owners of the company can sell their shares at lower price. But the price cannot be fixed below the face value," the BSEC official said.
Walton Hi-Tech Industries will raise the said amount of capital to expand business and repay bank loans.
In the bidding, one eligible investor (EI) quoted the highest price of Tk 765 each for 0.7 per cent or 100 shares only.
The second highest price was quoted at Tk 684 each for 1.06 per cent or 14,600 shares.
Six EIs quoted prices ranging between Tk 600 to Tk 641 each, while 21 EI investors quoted prices ranging from Tk 400 to Tk 571 per share.
42 EIs quoted prices ranging from Tk 200 to Tk 370, 28 from Tk 100 to Tk 195 and remaining nine from Tk 12 to Tk 95 per share.
Finally, the cut-off price was fixed at Tk 315 per share meaning all EIs are entitled to receive shares at the prices ranging between Tk 315 to Tk 765.
According to the financial statement for the year ended on June 30, 2019, the company's weighted average earnings per share was Tk 28.42 and net asset value per share was Tk 243.16 after revaluation. The net asset value per share was Tk 138.53 before revaluation.
AAA Finance and Investment Ltd is the issue manager for the company's IPO.
