The Coppertech Industries made a flying trading debut on the bourses on Monday as its share price soared 348 per cent riding on the investors' 'irrational hype' over the new issue.
The engineering sector company's share was traded between Tk 30 and Tk 45.50, before closing at 44.80 each on the Dhaka Stock Exchange (DSE). Its issue price was Tk 10 each.
The company also topped the turnover chart on the prime bourse, with 7.62 million shares worth Tk 311 million changing hands, capturing 6.52 per cent of the day's total turnover.
On the Chittagong Stock Exchange (CSE), the company's share price soared 331 per cent to close at Tk 43.10 each.
The debutant was also the most traded stock on the port city's bourse with about 2.41 million shares of Tk 96.06 million changing hands on the day.
Market analysts said the investors showed great appetite for the newly listed stock amid short-term speculation. So, it created 'irrational hype' among investors on debut trading.
The 'unusual' price hike of Coppertceh reflects that investors were not investing cautiously, said an analyst, requesting anonymity.
He noted that investors were yet running behind the newly listed companies' shares with a view to get quick-gain as it was observed in the past.
General investors should be careful about 'abnormal' hike of low profile companies' share as their prices can plummet as fast as they soared, he added.
The Coppertceh, which received regulatory approval from the Bangladesh Securities and Exchange Commission (BSEC) on December 26, 2018, raised a fund worth Tk 200 million, offloading 20 million shares under the fixed price method.
The company's IPO subscription was held between March 31 and April 9 this year for resident and non-resident Bangladeshis.
On July 28, the DSE gave listing approval to the Coppertech following the regulatory instruction.
Approval for the listing of the company was delayed, as the prime bourse found some 'anomalies' in the company's financial statement.
The company will utilise the IPO proceeds to purchase plant and machineries, repay bank loans, construct building and IPO expenses.
As per un-audited financial statements, the company's nine months (July 2018- March 2019) profit after tax was Tk 34.87 million and pre-IPO earnings per share (EPS) was Tk 0.87 for the period ended on 31 March 2019.
However, post-IPO EPS was Tk 0.58 for the nine months period ended on 31 March 2019.
The net asset value (NAV) per share was Tk 12.87 as on March 31, 2019.
The company's paid-up capital is Tk 600 million and authorised capital is Tk 700 million, while the total number of securities is 60 million.
Sponsor-directors own 30.07 per cent stake in the company while institutional investors own 19.94 per cent, foreign investors 0.06 per cent and the general public 49.93 per cent as on July 31, 2019, the DSE data shows.
Located in Hobiganj, the Coppertech Industries is a copper pipe, tube, bus bar, strip, and wire manufacturer in Bangladesh. The company started its commercial operation in June 2014.
The core markets for the product of the company are power plants, AC fridge manufacturing factory and workshop, engineering workshop, electronic product producer and other local customers, according to IPO prospectus.
MTB Capital is working as issue manager of the company's IPO process.