Lub-rref (Bangladesh), a local lubricant producer, is set to hold initial public offering (IPO) lottery draw on February 23 to allocate 45.24 million ordinary shares.
The IPO subscription of Lub-rref which products are branded as BNO Lubricants was held between January 26 and February 1, this year.
The company has so far received a good response from the general investors for its IPO shares which raised Tk 1.50 billion under the book-building method.
The general investors had applied to buy more than 12 times higher the number of IPO shares as they applied for the company's shares worth Tk 7.57 billion in total, officials said.
The stock market regulator - Bangladesh Securities and Exchange Commission (BSEC) -- approved the company's IPO proposal on November 18 last year.
Earlier the company completed electronic bidding and explored its cut- off price of shares - a requirement for going public under the book building method.
The cut-off price of Lub-rref shares was fixed at Tk 30 each through electronic bidding by eligible investors held between October 12 and October 15, 2020.
Of the total 45.24 million ordinary shares, 22.62 million shares are reserved for eligible investors (EIs) at their own bid price.
The general investors, including non-resident Bangladeshis, will get 22.62 million ordinary shares at Tk 27 each, a 10 per cent discount on the cut-off price.
The IPO proceeds will be used for expanding its existing refinery plat with an aim to meet the growing demand for lubricants from both home and abroad and repay some expensive bank loans.
Alongside the construction of a new base oil refinery at the Julda Industrial Theme Park in Chattogram, the company will expand its present factory and fit it with the means to produce a higher grade of lubricant products.
To finance the expansion, around Tk 980 million will be funded through Lub-rref's IPO proceeds.
As of the fiscal year that ended on June 30, 2019, the company earned Tk 2.08 against each of its shares, while the five years' average earnings per share were Tk 2.23.
The net asset value per share of the company, with a Tk 1.0 billion paid- up capital was Tk 31.92 a year ago, while NAV would be Tk 25.96 without adding the revaluation surplus of assets.
NRB Equity Management is working as the issue manager for the company's IPO process.
Incorporated in 2001, the company commercially launched its manufacturing plant in 2006. The Lub-rref imports base oil and additives to blend luboil of various formulations to cater to the needs of automotives and industries.