FAR Chemical Industries, a dyeing chemical manufacturer, yesterday made happy debut at the bourses despite controversy over its disclosure in the IPO prospectus.
The share price rallied 426% to Tk51.9 on its offer value of Tk10 each. The newcomer was the most traded stock of the session also with turnover of Tk27.7 crore changing hands.
It accounted for 12.6% of the total turnover of the Dhaka Stock Exchange.
FAR Chemical IPO subscription hit around 73 times, which indicated that investors showed interest in the company.
Despite ongoing low trade volume in the market, the newly introduced stock has registered a satisfactory trade volume compared to that of the last few debutants, said a broker.
Beginning of its share trading delayed, as Bangladesh Securities and Exchange Commission (BSEC) asked the company to publish its legal affairs issues in the newspapers.
The company did not include in its IPO prospectus about a criminal case filed by the BSEC against two of its directors for their involvement in forgery of rights issue of FAR Chemicals’ associated firm RN Spinning, a listed company, spurring controversy.
In first nine months (July 2013 to March 2014) of last fiscal year, the company made Tk26.73 crore profits against Tk23.2 crore a year earlier.
In the fiscal year 2013, the business generated a profit of TK39.6 crore while Tk21.3 crore in FY12 and Tk6.4 in FY11.
Revenue has increased due to rising demands of basic chemical products over the past few years in the international markets.
The company’s star product is softening agent, which contributed 30% of total turnover generated in 2013.
The chemical manufacturer has a yearly production capacity of 9 lakh kilograms while its utilisation capacity stands at 83.72%, according to IPO prospectus.
The stock listed in the pharmaceuticals and chemical sector at the bourses has shown consistent increase in profit after tax.
The chemical product maker has used the fixed price method to raise Tk12 crore from public, which the company will use to buy capital machinery and in turn increase the current capacity.