Net proceeds from the IPO will be used to buy machineries, land development and meet IPO expenses
Bangladesh Securities and Exchange Commission (BSEC) on Thursday approved the country's first small and medium enterprise initial public offer (SME IPO) in favour of Nialco Alloys Limited (NAL), who intends to raise Tk7.50 crore.
The approval was given at a commission meeting held at its headquarters. The Commission Chairman Prof Shibli Rubaiyat-Ul Islam presided over the meeting, said a BSEC statement.
Under the fixed price method by qualified investors, Nialco Alloys will offload 7.5 million ordinary shares for Tk10 each.
Net proceeds from the IPO will be used to buy machineries, land development and meet IPO expenses.
According to the financial statement ending September 30, 2020, the company's net asset value (NAV) per share was Tk12.43, while earnings per share (EPS) were Tk0.91.
MTB Capital Limited will act as the issue manager for the IPO process.
The company will not be able to issue any bonus shares for the next three years from the share trade on the SME platform.
To accelerate the growth of small-cap companies, the securities regulator formulated rules titled 'Bangladesh Securities and Exchange Commission (Qualified Investor Offer by Small Cap Companies) Rules, 2018.
After raising capital through a qualified investor offer (QIO), a company's paid-up capital will be at least Tk5 crore and the figure would not cross Tk30 crore.
The Chittagong-based Nialco Alloys was incorporated in 2011.
Principal activities of the company included manufacturing high-grade bronze and brass ingots including gun metal, phosphorus bronze, leaded bronze, aluminum bronze, manganese bronze, sand cast brass (scb), high tensile brass (htb), die cast brass (dcb), master alloys, phosphorus copper, etc. conforming to BS, IS, JIS, DIN, ASTM, UNI and as per all other international standards.
The commission also approved the draft prospectuses of Royal Bengal Investment Management Company Ltd (RBIMCO) BGFI fund.
The initial size of the fund will be Tk10 crore.
The sponsor will contribute Tk1 crore while the remaining Tk9 crore will be collected through sales of units of Tk10 each.
RBIMCO is the fund manager of the fund.