The Meera Agro Inputs Limited, a seed processing company, has sought to be enlisted on the newly-launched small and medium enterprise (SME) platform of the Dhaka Stock Exchange.
The company has proposed raising Tk5 crore for expanding its business through Qualified Investor Offer (QIO). It is the first company that applied for the SME board listing.
The company has already submitted its prospectus to the bourse.
The DSE's SME Platform was launched on April 30, 2019.
How will they use proceeds?
The company will utilise Tk45 lakh for land development and Tk2.92 for balancing, modernisation, rehabilitation and expansion of its existing projects.
Some Tk1.66 crore will be used as the working capital while Tk7 lakh will be spent on paying the bills for the share issuance process through the QIO.
The company's paid-up capital will reach Tk11 crore from the existing Tk6 crore if it can raise the money.
Financial performance of Meera Agro
The company's net profit was Tk22.37 lakh in the first quarter (July-September) of the current fiscal year.
During the period, the company's earnings per share was Tk0.37, and the net asset value was Tk11.63.
In fiscal year 2018-19, the company earned Tk63 lakh in profit.
Operation of Meera
The Meera Agro Inputs Limited has been running its seed processing business for over 10 years.
On January 10, 2016, the company was incorporated as a private limited company. Later, it became a public limited company on November 2 this year.
Meera Agro has been involved in the production, processing, marketing and breeding of seeds.
Presently, the company is selling its products in Dhaka, Sylhet, Chattogram, Cumilla, Munshiganj, Meherpur, Chuadanga, Rangpur and Bogura.
The company sells seeds of rice, maize, cauliflower, cabbage, carrot, bitter gourd, tomato, watermelon, cucumber, chilli, kohlrabi and radish.
Seed industry in Bangladesh
Quality seeds and materials meant for plantation are key agricultural inputs which determine the productivity of crops. The quality of seed accounts for 20-25 percent of productivity.
The seed market is growing due to extensive campaigns by both private companies and farmers.
The market of quality seeds – supplied by public and private sectors – stood at 3.5 lakh tonnes, although the amount was around 1 lakh tonnes a decade ago.
The market grows by more than 10 percent a year with the shares of the private sector rising gradually.
The private sector mainly contributes to growth of the overall seed market amounting to more than Tk1,000 crore at present.
Now, apart from the Bangladesh Agriculture Development Corporation, more than 100 firms, including some non-government organisations, sell seeds, mainly hybrids, through 18,000 registered dealers.
The overall demand for quality seed has also increased. The private sector's share in seed supply rose to 34 percent from 16 percent in the last six fiscal years.
According to the Meera Agro's prospectus, the total market size of seed industry was Tk2,350 crore in fiscal year 2018-19.
Open-pollinated seeds have a 34-percent share while hybrid seeds have a 66-percent stake in the market.
The ACI has a 6-percent share, the Lal Teer Seed 16 percent, the United Seed 11 percent, the AR Malik 12 percent, the Supreme Seed Company 4 percent, the Metal Seeds 5 percent, the Jamalpur Seed 10 percent and others have 36 percent shares.
The AAA Finance and Investment is acting as an issue manager of Meera.