Mozaffar Hossain Spinning Mills Limited made its debut at the bourses yesterday, riding on the bullish market trend.
The 32nd stock in the textile segment closed at Tk45.3 each, registering a gain of over 353% on its offer value of Tk10 each at the Dhaka Stock Exchange.
Its price movement ranged between Tk40 and Tk48 during the session.
Shares worth more than Tk34.1 crore changed hands to make up 4.8% of the total DSE turnover.
First quarter profit, as on September last year, of the textile sector company stood at Tk2.4 crore after tax against a profit of Tk1.9 crore during the same period in 2012.
The Q1 profit is almost equal to the company’s 2012 profit of Tk2.5 crore, which is 56% higher than Tk1.6 crore of profit recorded in 2011, according to the IPO prospectus.
The company used the IPO fund to repay its term loan that would help increase the company’s profitability, analysts say. As on December 2013, the company had a long-term loan of Tk26.2 crore.
A high borrowing cost - Tk6.4 crore in 2012 and Tk4.4 crore in 2011 – had an adverse impact on the profitability in the earlier years.
The 100% export-oriented company reported annual sales of Tk39 crore in December 2012 as against Tk26.6 crore in December 2011.
The company raised Tk27.5 crore through initial public offering of 2.75 crore ordinary shares at an offer price of Tk10 each.
The company previously mentioned its intention to use the raised fund to repay its term loan and meet the IPO expenses.
According to unaudited financial report of the company ended on September 30 last year, the net asset value per share of the company is Tk16.48.