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Dhaka Tribune

Matin Spinning debut upsets investors

Update : 08 Apr 2014, 07:17 PM

Matin Spinning Mills Ltd stocks saw a price hike of 13% in its debut yesterday – an increase nowhere close to the debut prices of other companies recently listed on the stock exchanges.

The price against trend has frustrated the eager investors, analysts said.

The listed mill went against the trend as previously seen several other issues rising up to four times of their latest net asset price due to having excess demand for the stocks.

Investors ordered shares worth over Tk832 crore against the offer of Tk126 crore, according to the Chittagong Stock Exchange.  The over-subscription, therefore, was more than six times the offered value.

“The stock did not deliver in accordance with the over-expectation in the market as we have seen in the recent times. This reaction to the market, however, seems rational,” said Md Moniruzzaman, managing director of IDLC Investments Ltd, the issue manager.

He said the newly listed company would be attracting investors once it starts making the best out of its plant expansion plans.

The stock closed at Tk41.9 with a traded value of Tk19.3 crore or 3% of the day’s total turnover at Dhaka Stock Exchange.

The offered value for the stocks was set at Tk37 each, including a premium of Tk27.

The IPO proceeds of Tk123 crore will be used to expand its existing plant (Melange Project) and rest of the amount for meeting expenses of IPO process.

The yarn exporter has made a yearly profit of Tk25.2 crore in 2013 while Tk20.5 crore in 2012 and has sustained its profitability during the second half of the current fiscal despite economic turbulence.

From July to December last year, the company made profits of Tk12.86 crore, a slight increase from Tk12.8 crore a year earlier, according to its financial statements.

Nevertheless, the company has shown substantial drop in annual sales figure in 2013 against 2012 and compensated the gap with increase of other income such as foreign currency exchange gain that changed by Tk2.2 crore in 2013.

Matin Spinning Mills, an export-oriented cotton-spinning mill from DBL Group, started commercial operation in October 2006. It is the 34th listed company in the textile sector at the Dhaka Stock Exchange. 

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