Pathogen crushes Delta Hospital’s listing dreams
Delta Hospital, which got the green signal in February to improve Tk 50 crore, has requested the Bangladesh Securities and Exchange Commission (BSEC) to cancel its initial public offering since it got low premium through bidding.
Premium is an additional sum of money over the face value of a share that investors pay if they buy it through IPO.
Institutional investors set the cut-off price of its shares at Tk 11 each through bidding whereas the facial skin value of the business's shares is Tk 10 each. So, the premium would be Tk 1 per share.
If a company fails to secure high premium then it will need to offload an increased number of shares, said the official of the issuer company.
The sponsors must buy shares to adhere to the regulator's rules of experiencing individually 2 % and jointly 30 per cent share of their company.
As a result of low cut-off price, post-IPO shareholdings of the business's seven out of 10 directors would flunk of the two 2 % mandatory minimum shareholding requirement.
The sponsor-directors' joint shareholding would also fall below 30 %.
"The premium is drastically low compared to our net asset value. Our paid-up capital will go up while raising the fund, that will affect our dividend-paying capability in future," said a director of a healthcare facility asking never to be named.
The business's net asset value is Tk 45.84 as on June 2019.
"Our bidding time coincided with the COVID-19 crisis period. Subsequently, we got lower prices in the bidding," the director added.
The electronic bidding beneath the book building method of the IPO occurred from March 22 to March 25.
The best bidding price was Tk 46 a share and the lowest Tk 11.
"Institutional investors were a bit shaky as a result of ongoing pandemic. So these were hesitant about bidding high," said the study head of a secured asset management company.
Well-performing companies will not come to the market if they do not get good premium, he said. The regulator on Wednesday directed both the stock exchanges to carry onto the amount of money of the bidding until further notice after Delta Hospital had sent a letter for cancelling its IPO.
