South Bangla Bank’s IPO subscription hits 14 times high

The bank’s IPO shares to be allocated Thursday

FE ONLINE REPORT | Tuesday, 27 July 2021

The initial public offering (IPO) subscription of South Bangla Agriculture & Commerce Bank (SBAC) hit 14 times high and the bank will be allocated IPO shares Thursday, officials said.

The private lender’s IPO subscription was held between July 5 and July 12, aiming to raise Tk 1.0 billion from the capital market under the fixed price method.

The bank’s IPO shares will be allotted on the newly introduced pro-rata basis instead of lottery system at 12 noon on Thursday at the Dhaka Stock Exchange premises, says a press release on Tuesday.

According to DSE, general investors have applied for shares worth Tk 6.61 billion, affected small investors worth Tk 1.31 billion, non-resident Bangladeshis Tk 917 million and eligible investors worth Tk 5.07 billion.

The bank received total IPO application worth Tk 13.91 billion against Tk 1.0 billion of IPO shares, which was oversubscribed by 13.91 times higher.

Mosleh Uddin Ahmed, managing director & CEO of the South Bangla Agriculture & Commerce Bank congratulated the investors.

He said the overwhelming IPO applications showed people’s trust in the bank.

The primary shares were offered to the public at a face value of Tk10 per share.

The IPO shares distribution on pro-rata basis allows every general investor participating in the subscription to receive primary shares.

The private sector lender received consent from the Bangladesh Securities and Exchange Commission (BSEC) on May 9 to raise Tk 1.0 billion through issuing IPO shares.

SBAC, which began commercial operations in Bangladesh on February 20, 2013, will issue 100 million ordinary shares at face value of Tk 10 each.

With the IPO proceeds, the bank will buy government securities and meet its IPO expenses.

SBAC’s net asset value (NAV) per share stood at Tk 13.18 for the period that ended on September 30, 2020. For the nine-month period, its earning per share (EPS) was Tk 0.94.

Meanwhile, its weighted average earning per share for the last five years was Tk 1.24.

The stock market regulator gave a condition to the bank that it would not be allowed to declare and provide dividends before listing.

The bank’s authorised capital is Tk 10 billion while pre-IPO paid-up capital is Tk 6.84 billion, which will stand at Tk 7.84 billion after the IPO, according to the company’s prospectus.

ICB Capital Management is acting as the issue manager of the bank’s IPO process.

The bank is going public due mainly to be more accountable, transparent and to comply with a regulatory requirement, said a top official of the bank.

South Bangla Agriculture & Commerce Bank will be the 32th listed bank on the DSE.

The principal activities of the bank are to provide a comprehensive range of financial services: personal and commercial banking, trade services, cash management, treasury operations, as well as security and custody services, according to its website.

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