Five IPOs hit hurdles

Star (February 27, 2011)

The initial public offerings (IPO) of five companies, now awaiting regulatory approval to float shares worth Tk 721 crore, are uncertain on the back of a current bearish trend on the stockmarket.

The five companies, including a listed one, submitted IPO proposals to the Securities and Exchange Commission (SEC) under fixed price method. They are Central Depository Bangladesh Ltd (CDBL), STS Holdings Ltd, GBB Power Ltd, Rangpur Dairy and Food Products Ltd and Shurwid Industries Ltd.

Of them, CDBL plans to float four crore ordinary shares of Tk 10 each, with Tk 50 as premium. CDBL operates the central depository system for electronic share transfer. STS Holdings will offer three crore primary shares of Tk 10 each, at an issue price of Tk 125 including Tk 115 as premium.

GBB Power will float 2.05 crore ordinary shares of Tk 10 each, in addition to Tk 60 as premium, while Shurwid Industries will float 1.4 crore shares of Tk 10 each.

Rangpur Dairy will come up with 1.64 crore primary shares of Tk 10 each at an offer price of Tk 25, including Tk 15 as premium.

Bangladesh Shipping Corporation, which is a listed company, will go for repeat public offering (RPO). The company, however, did not finalise the RPO size, which will be announced after primary approval.

Officials at Securities and Exchange Commission (SEC) said, although the five companies' IPO proposals are pending for approval, more information are needed from some of them.

“The commission has already sent letters to them,” said Yeasin Ali, a member of the SEC.

Ali said it will not be a proper time to give nod to those IPOs, as the secondary market is now on a declining trend. The SEC will consider the IPOs when the market stabilises, he added.