Techno Drugs IPO opens Sunday

The initial public offering (IPO) of Techno Drugs is set to open for subscription tomorrow (Sunday), aiming to raise Tk 1 billion from the stock market under the book-building method.

General investors can apply for IPO shares through electronic subscription system until June 13, according to its IPO prospectus.

General investors, who have maintained a minimum investment of Tk 50,000 in the secondary market as of May 30, can apply for the company's IPO shares worth up to Tk 1.0 million, as the regulator has relaxed the standard cap of Tk 10,000 typically imposed for an investor in IPO applications.

The non-resident Bangladeshis who have a minimum investment of Tk 100,000 as on May 30 in matured listed securities at market price are eligible to apply for the IPO shares.

Earlier, the cut-off price of the drug maker's shares was fixed at Tk 34 through electronic bidding by institutional investors between April 21 and April 24 -- a requirement for going public under the book-building method.

The general investors, including non-resident Bangladeshis, however, will get shares at a 30 per cent discount on the cut-off price, meaning they will be able to buy at Tk 24 each.

Techno Drugs received regulatory approval from the Bangladesh Securities and Exchange Commission (BSEC) on March 7 for raising the fund 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 are earmarked for IPO expenses. According to its financial statements, Techno Drugs' sales dropped 45 per cent year-on-year to Tk 2.73 billion in FY23 while net profit plunged 59 per cent to Tk 195.5 million.

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

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

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 at home and abroad.

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

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