The bidding for shares of Esquire Knit Composite Limited (EKCL) by the eligible investors started on Monday for discovering the cut-off price.
Esquire Knit Composite, a unit of Esquire Group, will raise a capital worth Tk 1.50 billion from the capital market under the book building method for its business expansion.
The bidding of shares of the company through the uniform and integrated electronic subscription system of the stock exchanges will be continued till July 12.
The offer period for eligible investors (EIs) will start at 10:30am on July 15 and continue till 10:30pm on July 16, according to a disclosure posted on the Dhaka Stock Exchange (DSE) on Monday.
The EIs shall submit their valuation report along with workings and calculations to the exchange through electronic subscription system from 10:31am on July 16 to 10:30am on July 18.
According to the disclosure, the EIs, who will not participate in the bidding during the bidding period, will not be able to participate in the offer period.
The EIs, who will participate in the bidding period above the face value, will be able to participate in the offer period irrespective of cut-off price, said the statement.
The export-oriented knit garments factory held a road show in April 2017 as part of its plan for the initial public offering (IPO).
Book building is a process through which an issuer attempts to determine the price to offer for its shares based on demand from institutional investors.
As per the book-building method, the institutional investors will get 60 per cent shares at the cut-off price which will be set by the EIs through electronic bidding.
The remaining 40 per cent shares will be opened for the IPO participants, including affected small investors and non-resident Bangladeshis, at 10 per cent discount on the cut-off price.
Esquire Knit will use the IPO proceed for buying machinery, constructing building and civil construction, and to meet the IPO expenses.
Prime Finance Capital Management is the issue manager of the Esquire Knit IPO.
Currently, the company's paid-up capital is Tk 1.0 billion and authorised capital is Tk 2.0 billion.
Esquire Knit's revenue stood at Tk 4.45 billion for the year ended on June 30, 2017. Its net profit was Tk 312 million.
The company's weighted average earnings per share (EPS) was Tk 2.52 and net asset value (NAV) per share (with revaluation reserve) Tk 45.83 at the end of June 30, 2017.
Located at Sonargaon in Narayanganj, Esquire Knit has been emerging as a conglomerate with knitting, fabric dyeing and finishing facilities under one roof since its commercial launch in 2001.
The knitting unit of the company has a capacity of producing over 2.0 million pieces of garments per month.
At present, 50 textiles and garment companies are listed on DSE, accounting for about 4.0 per cent of total market capitalisation.