Nine companies raised more than Tk1,980 crore in 2014 by offering rights shares to their respective shareholders.
The figure shows a rise of 998% from Tk180 crore raised by six companies in 2013, according to the Dhaka Stock Exchange.
A total of 77.6 crore shares in the form of rights offer was issued in the concluded year, which was more than 1.8 crore in 2013.
A rights issue is an issue of additional shares by a listed company to raise capital from existing shareholders. With the rights, the existing shareholders have the privilege to buy a specified number of new shares from the firm at a particular price within a specified time.
Out of nine companies, Aramit Cement raised Tk25.41 crore, Generation Next Fashions around Tk113 crore, Rupali Life Insurance Tk36 crore, BRAC Bank Tk433 crore, Delta Spinners Tk9.2 crore, Midas Financing Tk60.2 crore, BIFC Tk33.6 crore, Investment Corporation of Bangladesh Tk1,055 crore and First Security Islami Bank Tk206 crore.
Among them, Aramit Cement, Rupali Life Insurance, BRAC Bank and ICB took premium.
The tendency of capital raising through rights offer and IPO increases when the market passes a bullish trend.
“Rights shares issuance increased as performance of the secondary market was relatively good in 2014 compared to the previous year,” said Akter H Sannamat, managing director at Union Capital.
“A listed company applies for issuing rights shares to further expand, repay loans or boost the company’s growth,” he said.
According to securities rules, a listed company must have profitability records for three preceding years and a credit rating if it wants to offer rights shares with premium.
