• Thursday, Dec 09, 2021
  • Last Update : 04:03 am

Mir Akhter’s profit creeps up ahead of its bourse debut

  • Published at 12:18 am February 2nd, 2021
Mir Akhter Hossain bourse debut

'Mir Akhter has been leveraging its broad spectrum of capabilities and strengths to implement large scale government and private construction projects'

Mir Akhter Hossain, whose shares will begin trading on the bourse from today, saw its net profits edge up 4 per cent to Tk 21.5 crore in the first half of 2020-21 as infrastructure works resumed in full steam following the lifting of countrywide shutdown on May 30 last year.

The company, which was founded in 1968, is among the top three companies in the infrastructure development sector in terms of capacity.

It is involved in the construction of roads, bridges, highways, railway tracks, airports, discharge channels, 5-star luxury hotels, civil constriction of power plants, functional buildings, factory buildings and complex infrastructural projects. 

It is actively engaged in gas pad drilling using high-tech utility rigs, river dredging, manufacturing of sleepers and soil stabilisation.

Mir Akhter’s notable completed projects include the Radisson Blu Water Garden hotel in Dhaka, Mirpur Flyover, Mugda General Hospital, Hatirjheel bridge, Liberation War Museum, Ashuganj 450MW power plant, the 22 kilometre-long Tangail four-lane highway, the 810 metre-long Gaforgaon bridge, the Cox’s Bazar airport runway, the 54 km Pabna railway track, Bakhakhali river dredging.

Given the progressively higher allocation for annual development programme each year, Mir Akhter is bound to benefit as it is directly attributable to the planned construction of industrial complexes, roads and bridges, power stations and civil infrastructure, said a recent report of Brac-EPL.

The government has set aside Tk 214,611 crore for fiscal 2020-21, up 11.2 per cent from the previous year.

“Mir Akhter has been leveraging its broad spectrum of capabilities and strengths to implement large scale government and private construction projects,” the report said.

Between 2005 and 2019, the company experienced revenue growth of 35 per cent. 

Its revenue, which stood at Tk 1,251.5 crore in 2019, comes from two major segments: own construction business (about 35 per cent) and joint ventures with internationally reputed construction companies (about 65 per cent). 

“Deep partnerships with international engineering companies, a notable track record of winning large contracts, state-of-the-art equipment portfolio and a highly experienced and professional engineering team consisting of 450 skilled engineers must give Mir Akhter a competitive advantage while bidding for large scale construction projects.”

The company, which currently has 37 ongoing projects worth about Tk 5,864 crore, has set its sights on making a space for itself in the $3.6 trillion global infrastructure market, Mir Nasir Hossain, its managing director, earlier told Dhaka Tribune.

Which is why it has raised Tk 125 crore from the stock market to ramp up its capacity. 

In future, it aims to bid for international tenders by itself or in a joint venture with its foreign partners such as Korea’s Samwhan Corporation, Seokwang Development Company, Halla Corporation; China’s Ranken Railways Construction Group, Wuhan Municipal Construction Group; Kuwait’s Sadeem Al Kuwait for General Trading and Contracting Company; Japan’s Komaihaltec Inc.

“We are a 52-year-old company with strong management and professional team. In fact, we are one of the preferred partners of the foreign infrastructural development companies for projects in Bangladesh,” Hossain added.

One of the downsides to Mir Akhter’s business is supply-side vagaries for its key raw materials such as brick, cement, concrete, tiles, rod, sand and so on, according to Brac-EPL.

“Although the company has a backward linkage of the constriction materials to support the construction works, it sources from the open market for construction materials. Any supply gap in both the local and international market may hamper the project completion in due time.” 

Mir Akhter is a highly leveraged company with a debt-to-equity ratio of 4:1, according to the report.

Although the company has a plan to repay Tk 40 crore from the initial public offering proceeds, the amount is “insignificant” compared to the current outstanding loan of Tk 1,500 crore.

IDLC Investments is the issue manager of Mir Akhter’s IPO, which got the approval from the stock market regulator on November 5.

The cut-off price of the shares was fixed at Tk60 each after the bidding. General investors will get a 10% discount on the cut-off price to buy it at Tk54.

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