Baraka Patenga Power's bidding to explore the cut-off price of its IPO shares is set to begin on Monday (February 22), aiming to raise Tk 2.25 billion under the book-building method.
The bidding - a requirement for going public under the book-building method - will be continued until February 25 (round the clock) as per the reschedule date.
Earlier, the bidding scheduled for Baraka Patenga Power's shares was from February 15 to February 18. The stock exchange has deferred the bidding date following an application by the company, officials said.
Only the eligible investors can participate to explore the cut-off price of the company's shares under the electronic bidding process.
Each eligible investor (EI) who intends to submit an application through the electronic subscription system (ESS) shall maintain a minimum investment of Tk 5.0 million only for approved pension funds, recognised provident funds and approved gratuity funds and other Els of Tk 10 million at market price in listed securities as on February 7 as well as February 11.
The minimum value for bidding shall be Tk 5.0 million which is in accordance with the Bangladesh Securities and Exchange Commission (BSEC) consent letter to the company dated January 11, 2021, according to a statement.
On January 5, this year, the stock market regulator allowed the company to explore cut-off price of its shares through eligible investors' bidding -- a requirement for going public under the book building method.
As per the regulatory approval, Baraka Patenga Power will raise Tk 2.25 billion from the capital market under the book-building method.
Of the IPO proceeds, more than Tk 1.44 billion will be invested in two of its subsidiaries --Karnaphuli Power and Shikalbaha Power, partial repay of long-term bank loans and bear the expenses of the IPO process.
Subsidiaries of the Baraka Patenga - Karnaphuli Power and Baraka Shikalbaha Power have already started commercial operation after implementing two (HFO) based IPP (Independent Power Producer) power plants having generation capacity of 110MW and 105MW respectively.
In the financial year (FY) 2019-20, the Baraka Patenga logged a profit of Tk 674 million, up a staggering 123.9 per cent.
According to the audited financial statement as of June 30, 2020, the company's consolidated earnings per share (EPS) were Tk 4.37 and separate Tk 1.84, consolidated net asset value per share Tk 23 without re-evaluated reserve and separate Tk 20.98.
Besides, the company's weighted average consolidated earnings per share for the last five years were Tk 3.30 and separate Tk 2.82.
Baraka Patenga Power holds 51 per cent shares of both the two companies, whose main role is to generate and supply electricity to the national grid.
LankaBangla Investment is the issue manager for the company's IPO process.
As per the BSEC directive, the company can declare only cash dividends for the next five years from the date of issuance of the consent letter of its IPO. Also, the company has to hold 51 per cent stakes in its two subsidiaries all the time.
Such a condition of the regulatory body would be good for the general investors, market analysts said.
Baraka Power, the parent company of Baraka Patenga Power is already listed on the bourses since 2011.