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Star Ceramics, a tiles and sanitary-ware maker, will raise Tk 600 million from the capital market under the book-building method for expanding its existing plant.
As part of raising capital, Star Ceramics held a road show for the eligible institutional investors on Thursday at the Radisson Blu Dhaka Water Garden Hotel in the city.
Eligible investors such as merchant banks, asset management companies, stock-dealers, banks, financial institutions, insurance companies, alternative investment fund-managers and other institutions approved by the securities regulator attended the event.
Syed A. K. Anwaruzzaman, chairman of the Star Ceramics, Qamar-Uz-Zaman, managing director, and Mohammad Sarwar Hossain, managing director of Roots Investment, were present, among others.
The issue-managers and the chairman of the company exhibited the company's fundamentals and future plan to the eligible investors during the road show.
A road show is a requirement under the book-building regulations before price discovery. Book building is a process through which an issuer attempts to determine the price of securities to be offered based on demand from institutional investors.
Syed A. K. Anwaruzzaman noted that Star Ceramics has been able to acquire 16 per cent of the domestic tiles market and 9.0 per cent sanitary ware market.
The present production capacity of the factory is 22,000 sqm of tiles a day and 1,200 pcs of sanitary ware a day, he said.
"We expect to acquire sustainable market share on the domestic market and raise our exports by continuing to explore the potential markets abroad in the near future," said Mr Anwaruzzaman.
"We'll establish a new sanitary ware plant, which will help us significantly scale up our existing sanitary-ware capacity," he said.
The company will utilise the IPO proceeds to expand the sanitary-ware plant at a cost of Tk 433 million, repay the bank loans of Tk 132 million while meeting the IPO expenses of Tk 35 million, according to the prospectus of the company.
Roots Investment and ICB Capital Management are jointly working as issue manager of the IPO, while Green Delta Capital is acting as a registrar to the issue.
The company, which started commercial production of tiles in January 2013, is engaged in manufacturing and marketing ceramic tiles and sanitary-ware.
The company's pre-IPO paid-up capital is Tk 1.50 billion and authorised capital is Tk 3.50 billion as of December 31, 2017.
The company's net profit soared 171 per cent year-on-year to Tk 206.50 million in the year to December 31, 2017, according to the prospectus.
The company's earnings per share stood at Tk 1.38 for the year ended on December 31, 2017 against Tk 0.66 the year before.
Presently, a total of 62 tiles, sanitary-ware and tableware manufacturers are operating in the country. Only five ceramic companies are listed on the Dhaka bourse.