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Cutt-off price discovery of Runner Auto IPO to begin Monday

  • Published at 10:32 pm September 6th, 2018
Bangladesh Securities and Exchange Commission (BSEC) building in Agargaon Dhaka Syed Zakir Hossain/Dhaka Tribune

IDLC Investments Limited is the issue manager of the IPO

Bidding for discovery of the cut-off price on the initial public offering (IPO) by Motorcycle manufacturer Runner Automobiles Ltd is set to begin on Monday, September 10.

Bidding on the company's shares will continue till 5:00pm on Thursday, September 13, officials of Runner Auto said. The company aims to raise Tk100 crore from the capital market through the IPO. 

The Bangladesh Securities and Exchange Commission (BSEC) approved the book building method for determining the cut-off price of Runner Auto shares at a meeting on July 10 this year. Under the book building method, the selling price of shares is set after bidding by eligible institutional investors.

After discovery of the cut-off price, institutional investors wishing to purchase shares will have to pay the set amount, while general investors will get the shares at a 10% discount on the cut-off price.

IDLC Investments Limited is the issue manager of the IPO. 

According to a Runner Auto statement, the company wishes to raise the funds for expansion and repayment of bank loans.

Of the targeted Tk100 crore in IPO proceeds, Tk63 crore will be spent on the design and development of new products, purchase of machinery, and upgrading of existing models, while Tk33 crore will be used to repay loans. The remaining Tk4 crore will used to cover IPO expenses.  

The company plans to develop new models of motorcycles in the 110-150cc range, and build on its existing 80-100cc models.

According to the financial statement ended on June 30 2017, Runner Auto’s Net Asset Value (NAV) per share stood at Tk41.94 (without revaluation), whereas the weighted average of Earning Per Share (EPS) was Tk3.31.