The money raised will be used to repay loans and purchase fixed assets
Krishibid Feed Limited will enter the stock market through Qualified Investors Offer (QIO) on the SME platform on Sunday.
The QIO will close for subscription on October 14 and during this period, the feed maker will offload 2.2 crore shares on offer for sale at Tk10 per share for all qualified investors.
The issue manager of the company is MTB Capital Limited.
Through this, they will raise Tk22 crore from the capital market’s SME platform and the money raised will be used to expand its operations.
According to an estimate, allocation of Tk2.3 crore has been fixed for expansion of production building, Tk2.8 crore for staff quarter building, Tk4.1 crore for plants and machinery, Tk5.7 crore for repayment of a long term loan from Premier Bank, Tk2.9 crore diesel generators and Tk4.1 crore for delivery vans, according to the IPO prospectus.
In this regard, the company got a qualified investor offer (QIO) consent from the Bangladesh Securities and Exchange Commission (BSEC) on Tuesday.
Speaking to the Dhaka Tribune, BSEC spokesperson and also its Executive Director Rezaul Karim said: “The Krishibid Feed has been allowed to withdraw money from the SME platform through QIO method from Sunday.”
Only those who have invested at least Tk50 lakh in the stock market can buy shares from this SME platform.
Meanwhile, when asked about the newly launched (SME) platform, he said that it is going to be included as the fourth company in the SME platform of the stock exchange.
“If 20-25 institutions are included here, I think the decline in the index will come down to a stable state,” he added.
The company will be listed on the SME platforms of local stock exchanges and only eligible investors can buy these shares.
The company cannot issue bonus shares for three years after its listing on the SME platform.
Krishibid Feed currently has 2.75 crore ordinary shares outstanding and a successful capital raising will result in a total of 4.95 crore shares.
The company is involved in the manufacturing, distributing and selling of all sorts of poultry, fish and cattle feed, informed the IPO prospectus.
The company during the July-December period last year registered revenue of Tk54 crore that resulted in a half-year net profit of Tk4.6 crore in 2020.
It implies earnings per share of Tk0.93 during the six months period after considering the post-IPO dilution in the total number of shares outstanding.
The SME secondary trading platform currently hosts three companies that have raised funds from qualified investors.
Krishibid Feed is going to be the fourth debutant stock this year.