As the country's stock market warmly welcomes the capital intensive large businesses, construction giants are heading for initial public offerings (IPOs).
National Development Engineers (NDE), a top construction company which built the new buildings of the Dhaka Stock Exchange (DSE) and the Bangladesh Securities and Exchange Commission (BSEC), has decided to go public.
The NDE follows the footsteps of the reputed construction house Mir Akhter Hossain Ltd which has recently made its debut on the bourses.
National Development Engineers has recently signed an issue management agreement with IDLC Investments, under which the leading merchant bank will assist the company's listing in the local bourses, according to a press statement by IDLC.
During the last decade, the company grew more than five times and now it is entering into many joint venture projects, said NDE Managing Director Rizwan Mustafiz, adding that the IPO would help strengthen the company's financials along with up-gradation in profile as a publicly listed company.
"Foreigners care about listing status a lot," he said while talking to The Business Standard on Monday.
NDE is a prominent name in the construction industry of Bangladesh having over four decades of experience with a proven track record, said the IDLC statement.
The company is mainly engaged in the construction of large buildings, power plants, industrial structures, airports, roads, bridges, and so forth.
NDE has successfully completed more than 500 various multidiscipline projects since its inception, said IDLC.
Rizwan Mustafiz said currently the company is working on 40 versatile projects worth around Tk8,000 crore in total.
Of the ongoing projects, 7-8 are four- and six-lane highways, five bridges, two airport terminals and one airport hangar, more than 20 large buildings, and two power plants.
In fiscal 2019-20, the company's sole projects turnover was nearly Tk800 crore, and including its portion in the joint venture projects, the turnover was around Tk1,000 crore, according to the managing director.
The company gained a reputation through the successful implementation of dozens of large building projects for government and autonomous organisations.
NDE is a Tk200 crore paid-up capital company now and planning to file for an IPO next year.
Neither the company nor its issue manager disclosed the tentative IPO size.
However, one of the NDE officials told TBS that the company might file for a Tk150 crore IPO under the book-building method.
Bangladeshi policymakers and the market regulator are working to get large companies listed on the stock market so that the market gets its desired depth and also the businesses can collect necessary capital from investors to reduce the burden on the country's banking system.
Rizwan Mustafiz said, listing and an enhancement of paid-up capital would ease the company's project financing and also attract more clients.
Alongside feeling proud to be a part of the development story of Bangladesh over the recent years, he is hopeful about a bigger construction boom in the country in coming years.