The cut-off price for each share of Bashundhara Paper Mills Limited (BPML) was set at Tk 80 as bidding for shares of the company by the eligible investors (EIs) through the uniform and integrated book building system concluded on Thursday.
A total of 474 eligible investors took part in the bidding under the book building system of the stock exchanges during a 72-hour bidding session. 20 percent investors offered between Tk 80-90 while 35 percent investors bid at around Tk 25 for each share.
The bidding began on Monday evening with institutional investors offering Tk 86 for each share.An eligible investor bid for 290,600 shares at Tk 86 each at the beginning of the bidding. During the 72-hour bidding, the eligible investors offered maximum Tk 90 and minimum Tk 11 for each share.
The total 474 eligible investors bid for 27, 86, 29,700 shares during the bidding that ended on Thursday.
As the issue size for the eligible investors (Tk 1.25 billion) has been covered between the Tk 80-90, the cut off price has been fixed at Tk 80. A total of 96 eligible investors bid between Tk 80-90 which covers 20 percent.
Bashundhara Paper Mills received the permission from Bangladesh Securities and Exchange Commission (BSEC) on August 27 to conduct the bidding process for determining the cut-off price for its IPO to raise Tk 2 billion (200 crore) from the capital market.
Of the total Tk 2 billion to be raised from the capital market, the issue size for the eligible investors was Tk 1.25 billion. However, the general investors will get the shares at Tk 72 each, a 10 percent lower than institutional bidding price, according to latest amendments of public issue rules.
Company sources said the funds raised from the IPO will be spent on buying new machinery, repaying loans and bearing the IPO expense and other costs of the company.
According to the financial statement for the year ending on June 30, 2016, the company’s net asset value (NAV) per share (EPS) was Tk 30.49, including revaluation reserve, whereas the value was Tk 15.79 without revaluation reserve. The weighted average of earnings per share (EPS) was Tk 1.46 for that year ended on June 30, 2016.
Bashundhara Paper Mills, a concern of country’s leading business conglomerate Bashundhara Group, produces a wide range of paper and paper products. The company also exports paper. It has three production units in Narayanganj and Munshiganj.