The initial public offering (IPO) subscription of Baraka Patenga Power Limited will open on 13 June and continue until 17 June.
Every general investor participating in the subscription will receive the primary shares.
The Bangladesh Securities and Exchange Commission (BSEC) allowed Baraka to issue company stock at a cut-off price of Tk32 per share to institutional investors, and to raise Tk225 crore from the capital market to expand its business.
The general public will enjoy a 10% discount on the price.
Institutional investors set the cut-off price at a 72-hour bidding held between 22 February and 25 February this year.
On 5 January, Baraka Patenga received approval from the BSEC to explore the price of primary shares.
The company will utilise Tk144.34 crore, part of the IPO proceeds, to invest in two of its power generation subsidiaries – Karnaphuli Power Ltd and Baraka Shikalbaha Power Ltd.
The remaining funds will be used in repaying loans and meeting expenses of the IPO process, BSEC said in a statement.
LankaBangla Investments Ltd, a leading local merchant bank, is the issue manager for the Baraka Patenga IPO.
BSEC has barred the company from any efforts to increase its paid-up capital by issuing bonus shares within the next five years. Also, the company must hold at least 51% shares of its two subsidiaries.
At the end of fiscal 2019-2020, Baraka Patenga's net asset value (NAV) per share stood at Tk23 without asset revaluation surplus added, and the NAV per share was Tk20.98, excluding that of its subsidiaries.
In the last fiscal year, the consolidated earnings per share (EPS) stood at Tk4.37, which was Tk1.84 on a solo basis. The five-year weighted average of the company's consolidated EPS was Tk3.30, which would be Tk2.82 if the profits of subsidiaries were excluded.
Baraka Group, primarily a venture of non-resident Bangladeshis, started in the mid-2000s to develop a modern residential area in Sylhet.
The group entered the power generation business more than a decade ago and its first power venture – Sylhet Barakatullah Electrodynamics, now Baraka Power Ltd – is listed on both the bourses.
Baraka Patenga Power owns a 50MW power plant in Patenga, Chattogram, which went into commercial operation in May 2014. Baraka Power owns 51% shares of Baraka Patenga.
Baraka Shikalbaha, a 105MW heavy fuel oil-based power plant, came into production in May 2019, while Karnaphuli Power, a 110MW plant, started generating power in August the same year.