The cut-off price of Esquire Knit Composite share has been fixed at Tk 45 each, as discovered by institutional investors through bidding under a book-building method.
Esquire Knit Composite, a business unit of Esquire Group, will raise a capital worth Tk 1.50 billion under the book building method for its business expansion.
The proceeds will be used for buying machinery, constructing building and civil works, and to meet the IPO expenses.
The bidding for discovering the cut-off price of Esquire Knit's shares by eligible institutional investors was held between July 9 and July 12.
A total of 508 registered eligible institutional investors took part in bidding at different price levels between Tk 15 and Tk 53 for Esquire Knit Composite shares.
Of them, some 104 eligible institutional investors bet for buying Esquire Knit shares at Tk 45 or above Tk 45.
Finally, the company's cut-off price has been fixed at Tk 45 each as per the book-building method.
According to book-building method, the institutional investors will get 60 per cent shares at the cut-off price of Tk 45 each.
The remaining 40 per cent shares will be opened for the initial public offering (IPO) participants, including affected small investors and non-resident Bangladeshis.
The general investors will get IPO price at 10 per cent discount on cut-off price, meaning the general investors will get each share of the company at Tk 40.50 each.
With the completion of institutional bidding under the book-building method, the company will now apply to the Bangladesh Securities and Exchange Commission (BSEC) for regulatory approval to float the IPO for general investors.
The public subscription will begin after the regulatory approval.
The securities regulator allowed the Esquire Knit to conduct bidding its shares to discover cut-off price of its shares on January 23.
The export-oriented knit garments factory held a road show for institutional investors in April 2017 as part of its plan for the IPO.
Book building is a process through which an issuer attempts to determine the price to offer for its shares based on demand from institutional investors.
Prime Finance Capital Management is the issue manager of the Esquire Knit IPO.
Currently, the company's paid-up capital is Tk 1.0 billion and authorised capital is Tk 2.0 billion.
Esquire Knit's revenue stood at Tk 4.45 billion for the year that ended on June 30, 2017. Its net profit was Tk 312 million.
The company's weighted earnings per share (EPS) was Tk 2.52 and net asset value (NAV) per share (with revaluation reserve) Tk 45.83 at the end of June 30, 2017.
Located at Sonargaon in Narayanganj, Esquire Knit has been emerging as a conglomerate with knitting, fabric dyeing and finishing facilities under one roof since its commercial launch in 2001.
The knitting unit of the company has a capacity of producing over 2.0 million pieces of garments per month.
At present, 50 textiles and garment companies are listed on DSE, accounting for about 4.0 per cent of total market capitalisation.
