The stock market regulator has allowed Walton Hi-Tech Industries to sell its shares to eligible investors in a way that Bangladesh has never seen before in order to stop manipulation that happened with the previous method.
This time, the bidding will be held in a method known as the Dutch auction. It is a public offering auction structure in which the price of the offering is set after taking in all bids to determine the highest price at which the total offering can be sold.
The bidding for Walton Hi-Tech's shares by the eligible investors will start on March 2 for determining the cut-off price.
Asked about the difference between the new and old methods, Bangladesh Securities and Exchange Commission (BSEC) officials said no information, unlike the last time, would be disclosed during the offering.
Also, the eligible investors will have to bid the amount for which they will buy and they will have to pay the money.
Last month, the BSEC allowed Walton Hi-Tech to explore the cut-off price of its shares through electronic bidding under the book building method of the initial public offering (IPO).
The company wants to raise Tk100 crore through IPO.
Within two working days of bidding, the eligible investors will have to submit their valuation report, along with workings and calculations, to the Dhaka Stock Exchange through an electronic subscription system.
The bidding offer for eligible investors will start at 5pm on March 2 and continue until 5pm on March 5, said sources.
As per the book building method, the eligible investors will get 50 percent shares at the cut-off price through electronic bidding.
The remaining 50 percent shares will be open to the IPO participants, including affected small investors and non-resident Bangladeshis, at a 10 percent discount on the cut-off price.
Walton Hi-Tech will use the IPO proceeds to extend its businesses, repay bank loans, and meet IPO costs.
The company's weighted average earnings per share were Tk28.42 and net asset value per share was Tk243.16 after revaluation. The net asset value per share was Tk138.53 before revaluation.
Walton Hi-Tech – which started its journey in 1977 – began manufacturing refrigerator, freezer, air-conditioner, and compressor in early 2008. The company then branched out into television, and home as well as electrical appliances.
It now has a workforce of more than 20,000 people in 22 production bases on 680 acres of factory area.
The company's yearly production capacity is 10 million units based on market demands.
AAA Finance and Investment Ltd is the issue manager for the company's IPO.