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The securities regulator has allowed Lub-rref (Bangladesh) Ltd to determine its cut-off price required to raise funds from the capital market under the book building method.
The approval was given at a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC) on Thursday.
Under the book building method, Lub-rref (Bangladesh) will raise capital worth Tk 1.50 billion from the capital market.
The company's IPO fund will be utilised to expand business operations, repay bank loan and bear the IPO expense.
According to company's profile, Lub-rref imports base oil and additives to blend luboil of various formulations to cater to the needs of automotives and industries. The company produces about 35 items considering multifarious uses.
The company's automotive products include BNO diesel super, passenger car motor oil, motorbike oil, automotive gear oil, and automotive hydraulic oil.
Besides, the company produces industrial products, marine oil products and greases.
The company has received the regulatory approval to determine its cut-off price at which shares will be issued to eligible investors.
IPO shares will be issued to general investors at 10 per cent discount on cut-off price.
As per the financial statement for the year ended on June 30, 2019, the company's net asset value per share was Tk 31.93 (with revaluation reserve) and Tk 25.96 (without revaluation reserve). For the same period, the company's earnings per share (EPS) stood at Tk 2.08.
The weighted average EPS stood at Tk 2.23 based on the company's financials of last five years.
NRB Equity Management is the issue manager of Lub-rref (Bangladesh).
At Thursday's meeting, the securities regulator also approved a work plan to speed up the activities of its capital issue depart.
The securities regulator has approved the plan to facilitate raising of capitals through IPOs, debt securities and equity securities within the quickest possible time.
At Thursday's meeting, the securities regulator also fined two TREC (trading right entitlement certificate) holds of the Chittagong Stock Exchange (CSE) for breaching securities rules regarding misuse of their clients' funds.
As per the BSEC's decision, D. N. Securities and First lead Securities will have to pay penalty worth Tk 0.5 million and Tk0.2 million respectively.