Techno Drug’s cut-off price fixed at Tk 34 each

The cut-off price of initial public offering (IPO) shares of Techno Drug Ltd has been fixed at Tk 34 each through an electronic bidding process involving eligible investors.

The determination of this price took place over a 72-hour bidding window from April 21 to April 24, as mandated by the book-building method for companies seeking to go public.

During the period, 153 eligible investors offered bids ranging between Tk 24 and Tk 34 each for buying the drug maker’s IPO shares, according to the data from the electronic subscription system (ESS) released on Monday.

Among them, 143 investors, the highest number, submitted bids of Tk 34 per share, one offered Tk 30, another one bid at Tk 29, while three bidders offered Tk 24 and last one bid for Tk 15, the ESS data showed.

General investors, including non-resident Bangladeshis, will get the IPO shares at 30 per cent discount on the cut-off price, meaning they will get IPO shares at Tk 24 each.

Techno Drugs received regulatory approval from the Bangladesh Securities and Exchange Commission (BSEC) on March 7 for raising Tk 1 billion from the primary market.

With the IPO proceeds, the drug maker will purchase new machinery at an expense of Tk 270 million, expand its existing factory in Narsingdi at Tk 250 million, repay Tk 300 million against bank loans and build a new production unit in Gazipur at Tk 150 million. The remaining Tk 30 million is set aside for IPO expenses.

Imperial Capital and EBL Investments are acting as issue manager of the company’s IPO process.

Techno Drugs’ sales dropped 45 per cent year-on-year to Tk 2.73 billion in FY23 while profit plunged 59 per cent to Tk 195.5 million.

Accordingly, the earnings per share stood at Tk 2.08 for FY23, down from Tk 5.10 a year ago. Its net asset value per share with a revaluation surplus was Tk 27.78 while the asset value stands at Tk 22.57 per share without the revaluation surplus as of June 2023.

Techno Drugs will not be able to declare dividends before the listing, according to the regulator.

Established in 2009, the drug maker produces human and veterinary medicines and sells them both at home and abroad.

Techno Drugs also claims that it pioneered the production of oncology medicines in Bangladesh.

[email protected]