Cut-off price of Walton shares unpublished
The bids will be taken into consideration only after the deposited money enters into bank accounts of the DSE
The cut-off price of Walton Hi-Tech Industries Ltd shares, in an ongoing initial public offering (IPO), remains unpublished although the bidding closed at 5pm on Thursday.
Dhaka Stock Exchange (DSE) officials said not all the prepayments through bank draft, mainly against the last day bids, were settled through the banking channel.
The bids will be taken into consideration only after the deposited money enters into bank accounts of the DSE. The cut-off price will be calculated and published after that.
It may take up to Monday, said the premier bourse which is leading to run the electronic bidding platform for IPOs through the book building method.
The updated Public Issue Rules now prohibits displaying the live bidding updates on the platform.
Now, it is also a must that each eligible institutional investor deposits the quoted price of the total shares they are bidding for.
Walton Hi-Tech Industries is currently in a process to raise Tk100 crore in capital through the IPO.
As per the book building method rules, eligible institutional investors have submitted their bids to buy primary shares worth Tk50 crore of Walton Hi-Tech Industry.
The price at which the supply of the allocated Tk50 crore worth shares will be sold is called the cut-off price.
Later, the general public will apply in the traditional IPO at 10 percent discount for rest of the primary shares.
This is the first book building bidding that followed the Dutch auction method – where bidders are bound to buy the same number of shares at the same rate they had submitted their bid.
Prior to Walton Hi-Tech's bidding, all the successful bidders were getting primary shares at the cut-off price regardless what they had quoted previously.
Besides, now a bidder can change its price only once before the electronic bidding ends and the modified price must be within 10 percent of the initial bid.
Previously, unsuccessful bidders were also entitled to apply for some shares at the cut-off price even after the bidding ended.
The final allocation among eligible institutional investors was on a pro-rata basis – allocating shares among increased number of bidders in proportion to what they had wanted to buy.
However, sources informed The Business Standard that some top institutions submitted their final bid at around Tk400 for Walton Hi-Tech shares at large volumes.
A few brokerage firms' bids were as high as Tk600 for each shares, while The Business Standard came to know about the lowest bid to be at Tk350. However, the information is yet to be verified independently.
