Cut-off price of Runner Auto shares fixed at Tk75

The cut-off price on the Initial Public Offering (IPO) of Motorcycle manufacturer Runner Automobiles Ltd was set yesterday at Tk75 per share as the company aims to raise Tk100 crore from the capital market.

As per the book building method, eligible institutional investors took part in the price discovery of the shares by bidding between 5pm on Monday and the same time on Thursday. 

At the end of the bidding process, with a proposed rate between Tk84 and Tk75, the cut-off price was set at Tk75.

According to the rules of the book building method, the shares will be sold to general investors at a 10% discount, amounting to Tk67 per share.

The Bangladesh Securities and Exchange Commission (BSEC) approved the book building method for determining the cut-off price of Runner Auto shares at a meeting on July 10 this year.

IDLC Investments Limited is the issue manager of the IPO.

According to a Runner Auto statement, the company wishes to raise the funds for expansion and the repayment of bank loans.

Of the targeted Tk100 crore in IPO proceeds, Tk63 crore will be spent on the design and development of new products, the purchase of machinery and upgrading of existing models, while Tk33 crore will be used to repay loans. The remaining Tk4 crore will used to cover IPO expenses.

The company plans to develop new models of motorcycles in the 110-150cc range, and build on its existing 80-100cc models.

According to the financial statement ended on June 30 2017, Runner Auto’s Net Asset Value (NAV) per share stood at Tk41.94 (without revaluation), whereas the weighted average of Earning Per Share (EPS) was Tk3.31.