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Midland Bank braces itself to see investors' response in its debut trading on Monday on the Dhaka and Chittagong bourses after its initial public offering failed to draw much attention.
It will be the 35th listed bank, having seen two other banks performing poorly on the exchanges last year after the listing.
Midland Bank's latest financial disclosures do not hold out much optimism either.
The new generation private commercial bank has reported 58 per cent year-on-year fall in profit to Tk 189.20 million for the nine months through September 2022.
In the third quarter through September, profit fell at a slower pace - 10 per cent - to Tk 93.69 million, according to a stock exchange filing on Thursday.
The pre-IPO net asset value per share was Tk 12.79 until September 2022 while post-IPO Nav would be Tk 12.49.
The lender raised Tk 700 million from the primary market by floating 70 million ordinary shares under the fixed price method between February 16 and 23 this year.
About 26 per cent or 18.17 million IPO shares were unsold due to general investors' apathy to buy bank shares amid corruption and scams making headlines repeatedly.
The underwriters then subscribed the shares against five BO accounts, as per the public issue rules.
It is mandatory for underwriters to buy unsold IPO shares if they account for less than 35 per cent of the total offer. In other words, if at least 65 per cent of IPO shares are sold, underwriters help the company get listed on the bourses.
Eligible investors subscribed 23.91 million shares, mutual funds 7.92 million, general investors 14.32 million and non-resident Bangladeshis 0.74 million shares.
Midland Bank also allotted 4.94 million of its IPO shares to its employees under the employees' share purchase plan.
For the first time in nearly two decades, underwriters had to buy unsold IPO shares.
The size of the IPO of Midland Bank is significantly smaller compared to its peer new generation banks which had collected up to more than five times the fund from the market.
Last year Union Bank raised Tk 4.28 billion and Global Islami Bank raised Tk 4.25 billion from the public, the highest and second highest amounts among the listed banks.
Retail investors did not fully subscribe Global Islami Bank's IPO shares. Eligible institutional investors grabbed the unsold portion, helping the bank get listed.
Global Islami Bank failed to draw in investors since its debut trading on November 15 last year and it plunged below the face value on the opening day. The stock has since been languishing at Tk 9 each share.
Union Bank's share is also stuck at Tk 9.30 since early September last year.
The Bangladesh Securities and Exchange Commission (BSEC) allowed Midland Bank to raise fund through IPO on September 21 last year.
Of the IPO proceeds, the bank will invest over Tk 610 million in treasury bonds, Tk 50 million in the listed securities, and spend the remaining fund on the IPO expenses.
The sponsor-directors of Midland Bank must jointly hold at least 30 per cent of the shares, while each director must individually hold at least 2 per cent, as per the BSEC condition.
Also, the bank will have to appoint independent directors as per the corporate governance guidelines of the securities regulator.
LankaBangla Investments is working as the issue manager for the IPO.
The banking sector's total market-cap is Tk 670 billion, the second highest after the pharmaceuticals sector on the DSE. It will rise a bit after the latest bank starts trading.
The banking sector has long been facing a stressful situation due to a series of loan scams, rising default loans, and weak performance in the stock market.
Currently, seven banks are trading at below the face value of Tk 10.