Energypac Power Generation Ltd is going to open a public subscription for its Tk150 crore initial public offering (IPO) on 7 December and investors can apply to buy the primary shares of the electromechanical energy conglomerate till 13 December this year.
Eligible institutional investors in their recent biddings have set the reference price for each Energypac share at Tk35.
Qualified and institutional investors are buying 50% of the IPO shares at the cut-off price.
Meanwhile, individual investors will be able to purchase the remaining shares at Tk31.50 per share after a 10% discount on the cut-off price.
The company will mainly expand and energise its liquefied petroleum gas (LPG) business with the investors' money.
With the supply of natural gas through pipelines facing infrastructural and other constraints, LPG has gained momentum in Bangladesh over the last decade. In the last six years, the annual market demand for LPG tripled to around one million tonnes.
Most of the investors' funds will be used by Energypac to build a satellite station, popularly known as a daughter station, at Rupganj, Narayanganj with a storage capacity of 1,200 tonnes of LPG.
Given that Energypac will use a riverine route to carry a bulk of the LPG from its Khulna base to Narayanganj, and subsequently bottle it at a strategic location, the Rupganj station is anticipated to offer the company a cost and supply chain advantage.
It will also support the increased scale – from the existing 5,400 tonnes to over 6,000 tonnes – by adding to its existing set of cylinders and other ancillaries.
Energypac has received approval to set up 300 LPG refuelling stations nationwide and it has already entered into an agreement with the state-owned Padma Oil Company for 100 stations.
Energypac began its journey in 1995 as an electrical and engineering business. The company now consists of seven different divisions, according to an equity analysis report by brokerage firm, United Securities.
Its energy and power division supplies generators and provides operations, maintenance and installation services.
The motor vehicle division of the company imports, assembles and sells branded commercial vehicles and agro machineries.
Its LPG brand, G Gas, currently hovers between the sixth and eighth positions in terms of market share in Bangladesh's LPG market.
Meanwhile, Bangladesh Brand Forum considers G Gas as one of the top-three LPG brands in the country from a brand equity perspective.
Powerpac, the pre-engineered building and steel structure brand of the group, is also gaining market momentum.
Power, motor vehicle and LPG, which brought 70% of Energypac's Tk1,440 crore revenue last year, are the top three revenue earners for the conglomerate.
Power generation is the biggest business of Energypac in terms of revenue. The earnings of three of its power plants constitute 36.7% of the company's annual revenue.
However, analysts are looking for higher profitability in Energypac's consolidated account.
The conglomerate's balance sheet size is over Tk3,500 crore with bank liabilities of around Tk2,000 crore. It earned a net profit of less than Tk50 crore in the last fiscal year.