Kattali Textile Limited will start a new venture named Lucky Organics Limited to operate agro-business.
Lucky Organics Limited is yet to start its operation, but its investor company has estimated a 50 percent annual profit margin. There is no example of such a high-profit margin in agro-business in the country, though.
Kattali Textile's board of directors has decided to invest Tk8 crore in the new venture. The initial funding will be Tk3.20 crore, however.
Sattabrata Das, company secretary of Kattali Textile, told The Business Standard, "We will own 40 percent share of the new company, while some other investors will own the rest."
Kattali Textile's board of directors estimates an annual turnover of Tk1.57 crore, with a net profit of Tk79 lakh, from agro-business.
The net profit of Kattali Textile increased by 35 percent in the first quarter of the 2019-20 fiscal year. The company made a net profit of Tk6 crore with an Earnings Per Share (EPS) of Tk0.62, during this time.
The company's net profit during the same period of last year was Tk4.5 crore and EPS was Tk0.46.
Kattali Textile, in the last fiscal year, offered a two percent cash dividend and a 10 percent stock dividend to its shareholders.
The textile company raised Tk34 crore through an initial public offering in 2018. The company then issued 3.4 crore shares with a face value of Tk10 per share.
The company's trading started on November 12, 2018, in Dhaka Stock Exchange (DSE) with a trading price of Tk24.40. Its share price rose to, record-high, Tk33 on December 3, the same year.
The closing price of the company's share in the DSE was Tk11.90 on Thursday.