Investors to get 11 Techno Drugs’ IPO shares against Tk10,000

Pharmaceutical company Techno Drugs has raised Tk100 crore through its initial public offering (IPO) with the number of applicants totalling 25 times more than the share amounts allocated for general investors, according to officials familiar with the matter.

According to sources at the Dhaka Stock Exchange (DSE), investors who applied for Tk10,000 worth of shares will receive only 11 shares while those who applied for Tk1 lakh worth of shares will receive 110 shares, and investors who applied for up to Tk10 lakh worth of shares will receive 1,166 shares.

Besides, sources said non-resident Bangladeshis (NRB) will receive slightly more shares in the company’s IPO.

Among the NRB investors, those who applied for Tk10,000 worth of shares will receive 20 shares, and each applicant who applied for up to Tk10 lakh worth of shares will receive 2,160 shares.

Following the cancellation of the IPO lottery system, shares are now allocated proportionally based on the amount applied for in IPOs in the stock market.

A total of 1.12 lakh general investors, both domestic and NRB, applied for shares in the company’s IPO. Collectively, these applicants deposited Tk2,398 crore. Of this amount, 1.10 lakh domestic investors contributed Tk2,322 crore, while 1,603 NRBs deposited approximately Tk76 crore.

Earlier, Bangladesh Securities and Exchange Commission (BSEC) granted approval to Techno Drugs Ltd for a Tk100 crore IPO under the book-building system.

The sale price of the company’s shares was set at Tk34 through the book building method, with institutional investors purchasing shares at this price. However, individual investors received a 30% discount, bringing the price to Tk 24 per share.

The drug maker will use this fund to purchase machinery, balancing, modernisation, rehabilitation, and expansion (BMRE) of its Narsingdi factory, construction projects at its Gazipur facility, and repayment of loans.

The allocation of funds is outlined as follows: Tk25 crore for upgrading and renovating the Narsingdi factory, Tk15 crore for construction in Gazipur, Tk27 crore for machinery, Tk30 crore for loan repayment, and Tk3 crore for IPO expenses.

According to the Techno Drugs’ financial report for the 2022-23 fiscal year, the company logged a revenue of Tk273.35 crore, reflecting a decrease from Tk502.85 crore in the previous year.

The net profit after tax stood at Tk19.55 crore, compared to Tk47.98 crore a year earlier. The earnings per share for 2022-23 was Tk2.08, down from Tk5.10 in the previous fiscal year.

The drug company’s net asset value per share with revaluation was Tk27.74, and Tk22.57 without revaluation at the end of June 2023.

EBL Investments Ltd and Imperial Capital are acting as issue managers for the company.