Lub-rref share bidding begins Monday

The bidding for eligible investors (EIs) to discover the cut-off price of shares of Lub-rref (Bangladesh) Limited begins on Monday.

The bidding – a requirement for going public as per the book-building method – will take place until Thursday 5:00pm on the Dhaka Stock Exchange.

The Chittagong-based company is due to use the Tk150-crore IPO fund to install new machinery at its plant and repay some of its bank loans.

Only institutional investors can participate in exploring the cut-off price of the company's shares under the electronic bidding process. Besides, it will also be set based on the bids submitted by investors.

Although institutional investors are supposed to purchase shares of the company at the cut-off price, individual investors will get the scope for purchasing the shares at a 10 % discounted price through initial public offering (IPO).

The cost of the IPO process will also be met by the funds due to be received from public investors, said the Bangladesh Securities and Exchange Commission (BSEC).

The lubricant manufacturer will invest Tk98 crore to expand its existing manufacturing plant, which would enable the company to capture 20% lube oil market share, from the existing 8%, according to Lub-rref's IPO prospectus.

Lub-rref (Bangladesh) supplies "BNO Lubricants" brand lubricants across the country. 

According to the entity’s audited financial statements for the year ending on June 30, 2019, the company’s weighted net asset value per share was Tk31.93 while earnings per share (EPS) was Tk2.08.

NRB Equity Management Limited acts as the issue manager of the company’s IPO.