Share price of eGeneration, one of the leading IT consulting & software solutions companies, soared 294 per cent in the eight trading days after debut.
Shares of eGeneration, which raised Tk 150 million through initial public offering (IPO) under the fixed price method, closed at Tk 39.40 on Thursday, a 294 per cent rise or Tk 29.40 each, from its offer price of Tk 10.
The company was also the week's top gainer as its stock jumped 59.51 per cent in the outgoing week after flying debut in the week before on February 23.
On the debut trading day, the company's share price soared 50 per cent, the highest allowable limit on its offer price of Tk 10 each as the increase was capped by the regulatory limit for the debutant.
On the second day, its share price also rose 50 per cent after hitting the highest allowable limit.
As per securities rules, shares of a debutant can increase up to 50 per cent on offer value on the first trading day and the following day, price limit will remain open 50 per cent on closing price of debut trading.
From the third day, shares of the issue traded as usual, which means that 10 per cent upper and lower limit circuit breaker is allowed.
Almost every trading day, the company's shares were frozen on the upper circuit breaker as IPO shares winners were unwilling to sell their stakes hoping for higher profit in future.
Analysts said the investors showed their appetite for the new issue like before amid short-term speculation. So, it also created an 'irrational hype' among investors.
The IT sector company, which raised Tk 150 million by offloading 15 million ordinary shares using the fixed price method, received approval from the Bangladesh Securities and Exchange Commission (BSEC) on October 21, 2020.
The firm will utilise the IPO proceeds for purchasing commercial space for office (Tk 80 million), repaying bank loans (Tk 34 million), developing digital healthcare platform (Tk 18.39 million), and IPO- related expenses (Tk 17.61 million).
The software solutions company logged profits of Tk 48.76 million for the last six months of 2020, which was nearly 25 per cent lower, from Tk 64.93 million in the same period of the previous year, according to data from the DSE.
The company's basic earnings per share (EPS) stood at Tk 0.81 for July- December 2020 which was Tk 1.08 in the same period a year earlier. However, post-IPO EPS is Tk 0.65 for July-December 2020.
The company's authorised capital is Tk 1.0 billion and paid-up capital is Tk 750 million while total number of securities is 75 million.
The sponsor-directors own 37.39 per cent stake in the company while institutional investors own 36.42 per cent and the general public 26.19 per cent as on June 30, 2020 (year-ended).
Started commercial operation in November 2003, eGeneration has been working with the aim of making Bangladesh a global brand in providing innovative solutions and moving beyond being a low-cost IT solutions provider, according to its IPO prospectus.