The bidding for discovering cut-off price for Runner Automobiles IPO shares under the book-building method is set to begin on September 10.
Institutional bidding is a must for a company intends to go public using the book building method.
The bidding by the eligible institutional investors through the uniform and integrated electronic subscription system of the stock exchanges will be continued till September 13, officials said.
The Bangladesh Securities and Exchange Commission (BSEC) allowed the company to conduct bidding for discovering IPO (initial public offering) share price on July 10.
Runner Automobiles, which held road show on October 2016, will raise a capital worth Tk 1.0 billion from the capital market.
Book building is a process through which an issuer attempts to determine the price to offer for its security based on demand from institutional investors.
The eligible investors, who will not participate in the bidding, will not be able to participate in the offer period, said a DSE official.
After discovering the cut-off price, the shares will be opened for the public subscription for the IPO participants.
The institutional investors will purchase shares of a company at a cut-off price determined through the electronic bidding. And general investors will get the shares at 10 per cent discount on the cut-off price.
Runner Automobiles will use the IPO proceeds for research and development, purchase of machinery, repaying bank loans and meeting expenditure for the IPO process.
Of the IPO proceeds, Tk 630 million will be spent on design and development of new products, machinery purchase and upgradation of existing models, Tk 330 million for bank loan repayment and the remaining Tk 40 million will be IPO expenses.
According to the financial statement for the year ended on June 30, 2017, the company's net asset value (NAV) per share is Tk 55.70, with revaluation reserve. The value is Tk 41.94 without revaluation reserve.
And, the weighted average earnings per share (EPS) of the company is Tk 3.31.
IDLC Investments is working as the issue manager of the IPO.
Incorporated in 2000, the Runner Automobiles is a motorcycle manufacturer in Bangladesh. The company manufactures 12 different types of motorcycles ranging between 80 CC and 150 CC.
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