Share prices of Dominage Steel Building Systems continued to soar as its share jumped 9.78 per cent further on Sunday riding on investors' 'irrational hype' over the new issue.
The steel building maker's share price jumped 147 per cent in three trading days after the debut to close at Tk 24.70 on Sunday from its issue price of Tk 10 each, according to data with the Dhaka Stock Exchange (DSE).
The company made a flying trading debut as its share price rose 50 per cent -- the highest allowable limit-on debut on trading day on Wednesday to close at Tk 15 each on the issue price of Tk 10 each.
The second trading day, the company's share closed at Tk 22.50 each, soaring 50 per cent on the closing price of debut trading which was also the highest allowable limit.
The company's trading was halted within a few minutes in every trading session as investors rushed for buying its shares. But there were few sellers seen on the trading floor.
Market analysts said the investors showed their appetite for the new issue amid short-term speculation. So, it created an 'irrational hype' among investors from the debut trading.
The price of the shares of the company could not go up further despite high demand from investors due to the imposition of a new circuit breaker on debut shares, said a leading broker.
As per the new rules, the price limit of a new company will remain open 50 per cent on issue price on debut day and the following day, the price limit will remain open 50 per cent on the closing price of debut trading.
The normal circuit breaker is applicable from the third trading session for the newly listed stocks.
The Dominage Steel raised Tk 300 million from the capital market by issuing 30 million ordinary shares with an offer price of Tk 10 each using the fixed price method.
The company will utilise the IPO proceeds for the acquisition of new plant & machinery (55.77 per cent), building and other construction (30.14 per cent), electrical installation (7.56 per cent) and bearing the IPO related expenses (6.53 per cent).
As per audited annual financial statements, profit after tax was Tk 92.27 million for the year ended on 30 June 2020 against profit after tax of Tk 96.72 million for the year ended on 30 June 2019.
The company's post-IPO basic earnings per share (EPS) was Tk 0.97 for the year ended on 30 June 2020.
Pre-IPO net asset value (NAV) per share is Tk 21.23 as on 30 June 2020 and the same is Tk 17.68 (considering Post-IPO paid up shares).
The newly listed company has also recommended 10 per cent dividend (2.0 per cent cash and 8.0 per cent stock) for the year ended on June 30, 2020.
The company's paid-up capital is Tk 950 million, authorised capital is Tk 1.0 billion and the total number of securities is 95 million.
The sponsor-directors own 30.20 per cent stake in the company while institutional investors own 24.50 per cent and the general public 45.30 per cent as on November 30, 2020.
Incorporated in 2007, Dominage Steel is engaged in manufacturing of various pre-engineered steel buildings according to the designs and providing full-fledged architectural and consultancy services.