The cut-off price of shares of Baraka Patenga Power has been fixed at Tk 32 each through electronic bidding by eligible investors.
The bidding – a requirement for going public under the book-building method -- took place from 5:00 pm on February 22 to 5:00 pm on February 25 (round the clock) as per the revised schedule.
The power generation company’s cut-off price disclosed on Tuesday after 72 hours of bidding, according to a report uploaded by the electronic subscription system (ESS) for eligible investors.
During this period, 357 eligible investors offered different prices to buy the company’s shares. Among them, most bids were between Tk 32 and Tk 25.
A total of 183 bidders offered Tk 32 each while 39 bidders offered Tk 25 each.
The highest bidding price was Tk 32 and the lowest was Tk 13.
The general investors will get its IPO shares at a 10 per cent discount on the cut-off price, as per the book-building method.
Earlier on January 5, the Bangladesh Securities and Exchange Commission (BSEC) allowed Baraka Patenga to explore the cut-off price of its shares through eligible investors’ bidding.
As per 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 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.
After the repayment of the long-term debt of Baraka Patenga Power with a portion of the IPO proceeds, the company’s profitability would increase, said Chowdhury.
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.
Lanka Bangla 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.