ICB raises investment in Renata

State-owned Investment Corporation of Bangladesh (ICB) has purchased shares worth Tk237 crore of Renata Limited, raising ICB's investment in the pharmaceutical sector to 6.32 percent.

The ICB bought 23 lakh shares of Renata – each share priced at Tk1,030 – at the block market of the Dhaka Stock Exchange on Wednesday. The block market is a place where sale or purchase of securities takes place at an arranged price between two parties.

ICB officials said the corporation regularly purchases shares of different listed companies to put the market in a steady position. They purchased the chunk of shares for the ICB unit fund as a part of that routine task.

"Moreover, Renata Limited is one of the leading and fastest growing pharmaceutical companies. Both their growing business and gradually growing profit look good," commented an ICB top official under the condition of anonymity.             

Now 4.61 percent shares of Renata belong to ICB.

Abul Hossain, the incumbent managing director of ICB, previously served Renata as a nominated director. He resigned from the pharmaceutical company in January, which was approved in the meeting of the Renata board of directors on January 28.

Renata is planning to expand its business: The company has already purchased land in Gazipur and aims to establish a subsidiary in Ireland to reach the European market.

The company currently has Renata Oncology as its subsidiary where cancer treatment drugs are manufactured. The subsidiary is scheduled to be merge with Renata Limited.         

Recently, Square Pharmaceuticals struck a deal with Renata Oncology to manufacture drugs using the Renata production unit.   

The net profit of Renata Limited increased by 17 percent to Tk199 crore in the first half (July-December) of the current fiscal year. Its earnings per share (EPS) stood at Tk22.45 during this period.    

Earnings from pharmaceuticals of the company jumped by 19 percent to Tk1,261.43 crore during the July-December period. The earnings soared to 100 percent to Tk2,543 crore in five years till 2019 – while Renata's net profit surged by 124 percent to Tk382.33 crore within the period.       

The company gave 100 percent cash and 10 percent stock dividend to its shareholders in the last fiscal year.  

Renata's shares closed at Tk1,026.20 on Wednesday at the Dhaka Stock Exchange. Its highest price reached Tk1,350 per share in the last one year.  

Renata Limited entered the stock market in 1979 and its authorised capital is Tk250 crore.

The company's current paid-up capital is Tk88.58 crore and it has a reserve of Tk1,771 crore. Sponsor directors hold 51.17 percent shares of the company while institutional, foreign and general investors have 19 percent, 22.77 percent and 7.06 percent shares respectively.