New Line Clothings Ltd made a flying trading debut on Monday as its share price jumped 98 per cent due to investors' 'irrational hype' over the new issue.
The company's share price was traded between Tk 18.40 and Tk 30, before closing at Tk 19.80 on the Dhaka Stock Exchange (DSE) from its issue price of Tk 10 each.
The company also clinched the second spot on the prime bourse's transaction chart with 8.44 million shares worth nearly Tk 169 million changing hands.
On the Chittagong Stock Exchange (CSE), the company's share price also soared 94 per cent to close at Tk 19.40 each, from its offer price of Tk 10.
The debutant was also the most traded stock on the port city's bourse with about 2.31 million shares of Tk 45.59 million changing hands on Monday.
Market analysts said the investors showed enthusiasm for the newly listed stock amid short-term speculation. So, it created hype among the investors on the first day of trading.
New Line Clothings raised a fund worth Tk 300 million from the public by floating 30 million ordinary shares using the fixed price method at an offer price of Tk 10 each.
The company's initial public offering (IPO) subscription was held between February 18 and March 03.
The IPO was oversubscribed by nearly 28 times as the company received more than Tk 8.32 billion against IPO issue of Tk 300 million, officials said.
The securities regulator-Bangladesh Securities and Exchange Commission (BSEC) -- approved the company's IPO proposal on November 28, 2018.
The company will utilize the IPO fund for acquisition of plant & machinery (39.23 per cent), extension of factory building (25.44 per cent), partial loan repayment (30 per cent) and meeting IPO expenses (5.31 per cent), according to the IPO prospectus.
As per the entity's un-audited financial statements, profit after tax was Tk 58.73 million and basic earnings per share (EPS) of Tk 1.47 for the nine months (July 2018- March 2019) against profit after tax of Tk 55.59 million and basic EPS of Tk 1.39 for the same period of the previous year.
However, post-IPO EPS would be Tk 0.84 for nine months period that ended on 31 March 2019.
The company's paid-up capital is Tk 699 million and authorised capital is Tk 1.0 billion while total number of securities is 69.90 million.
The sponsor-directors own 30.82 per cent stake in the company while institutional investors 21.46 per cent and the general public 47.72 per cent as on March 31, 2019, the DSE data shows.
Banco Finance and Investment Ltd, Shandhani Life Finance Ltd and Southeast Bank Capital Services Ltd. acted as the issue managers for the IPO process.
At present, 54 textiles and garment companies are listed with the DSE, accounting for about 4.0 per cent of the DSE market capitalisation.
Established in 2000, the principal activities of the company is to manufacture various kinds of woven garments for both ladies and gents including trousers, shirts, children wear, gents wear, female wear, jackets, sportswear, denim garments and marketing.