Express Insurance Limited is going to hold its first virtual Initial Public Offering (IPO) lottery on Thursday.
The issue manager sources said the IPO lottery will be held at 10am both online and through manual systems. However, investors can only take part in the lottery online.
Earlier, the Bangladesh Securities and Exchange Commission (BSEC) allowed for the holding of an initial public offering (IPO) lottery through licensed digital platforms with manual systems supervised by the Central Depository Bangladesh Limited.
The investors have deposited around Tk158 crore in IPO to the company, which was six times its rising target.
Earlier, the company completed its subscription between June 14 and July 2.
Due to the outbreak of Covid-19, the company could not complete its subscription on time. Thereby, the subscription was extended with the securities regulator's approval.
The company's IPO subscription date was set on April 13. However, it could not receive applications on that day due to general holidays.
Express Insurance secured approval from the BSEC to go public with a condition to invest at least 20 percent of its IPO fund in the capital market. It will deposit 74 percent of the fund in banks.
As per the approval, the insurer will raise capital of Tk26 crore through offloading 2.6 crore ordinary shares at an offer price of Tk10 each under the fixed price method.
The market lot consists of 500 shares and an investor needs Tk5,000 to apply for each lot of the company's IPO shares.
AAA Finance and Investment, IIDFC Capital and BLI Capital are working as issue managers of Express Insurance.
From the IPO fund, Express Insurance will invest Tk2 crore in treasury bonds, Tk1 crore in mutual funds and Tk2.21 crore in the secondary market of the stock exchange.
The remaining Tk19.36 crore will be kept in fixed deposit receipts in banks.
Set up in 2000, the company's authorised capital is Tk75 crore, and paid-up capital stands at Tk39.11 crore.
Md Abdul Awal, chairman of Express Insurance, also holds the post of managing director of Synthia Securities, a brokerage firm.
Express Insurance's Vice-Chairman Mahfuza Younus also holds the post of chairman of Sonali Papers and Board Mills.
The revenue of Express Insurance has been stagnant for the last five years. The figure was Tk42 crore in 2014–which decreased to Tk40 crore in 2018.
Due to increasing operating costs, the net profit of the company has decreased by 49 percent during the five years. Its net profit was Tk4.38 crore in the 2018 financial year.