Under the fixed price method, Lovello Ice Cream will offload three crore ordinary shares for Tk10 each
The Bangladesh Securities and Exchange Commission (BSEC) on Thursday approved the prospectus for initial public offering (IPO) of Taufika Foods and Agro Industries Ltd's Lovello Ice Cream, to raise Tk30 crore.
The BSEC gave the approval at a commission meeting held in the capital on the day, presided by its chairman Prof Shibli Rubayat-Ul-Islam.
Under the fixed price method, Lovello Ice Cream will offload three crore ordinary shares for Tk10 each.
Of these, the company will allocate Tk9.04 crore for the acquisition of a plant and purchasing machinery, Tk5.78 crore for freezer purchase, Tk2.06 crore for vehicle purchases, Tk1.32 crore for investment in the depot to increase its capacity and Tk9 crore for repaying bank loans.
According to the financial statement ending September 30, 2019, the company's net asset value (NAV) per share was Tk212.17, while earnings per share (EPS) were Tk1.20.
Banco Finance and Investment Limited and Sandhani Life Finance Limited will act as the issue manager for the IPO process.
Three out of six companies currently hold 79% share of the country’s Tk1,200 crore ice-cream market.
According to industry stakeholders, the branded ice-cream market size is growing fast due to rising income levels, increase of access to electricity across the country, and changes in social structure and food habits.
Stakeholders, speaking to the Dhaka Tribune opined: “Market for branded ice cream is concentrated in the megacities due to issues regarding electricity, cold chain, and income level of the consumers.”
They also added that increasing access to electricity in rural areas is turning them into potential ice-cream markets in villages.
According to the study, two established names in the industry, Igloo and Polar, hold two-thirds (66%) of the market share.
Four companies, combined, hold 79% of the total market share.
Lovello's ice cream factory was set up on a five-acre land in Bhaluka upazila of Mymensingh, with an initial investment of Tk100 crore.