Master Feed Agrotec wants to raise Tk30 crore from the stock market through an initial public offering for its business expansion.
Manufacturing and marketing poultry, fish and cattle feeds are the main activities of the company. It is also engaged in poultry and fish farming.
The company has applied to the Bangladesh Securities Exchange Commission to raise the fund by issuing three crore ordinary shares with a face value of Tk10.
Ordinary shares – a synonym of common shares – represent equity ownership in a company proportionally with all other ordinary shareholders, and receive dividends at the discretion of the company's management.
Master Feed Agrotec allocates Tk16.33 crore for the acquisition of a plant and purchasing machinery, Tk2.72 crore for constructions, Tk5.90 crore for setting up a fully automatic chicken farm and Tk3.16 crore for working capital.
According to the last audited report, Master Feed Agrotec's net profit was Tk6.19 crore, an increase from Tk3.31 crore in the previous year.
In the first quarter of the last fiscal year, the company's net profit was Tk1.77 crore, which was Tk1.17 crore in the same period of the previous year.
Last year, its net revenue was Tk91.46 crore, an 80.68 percent increase from that of the previous year.
At the same time, its earnings per share were Tk1.08, up from Tk0.58 in the previous year.
The net asset value per share of the company was Tk12.64 as of September 30, 2019.
The company has a number of competitors in the sector. Of them, Aman Feed and National Feed Mills are listed on the stock market.
Besides, Quality Feed, Paragon Feed Mill, Nourish Poultry and Hatchery, Provita Feed Mill, New Hope Feed Mill (bd), Kazi Feed, ACI-Godrej Agrovet (Pvt), Aftab Feed Products, Advance Poultry and Fish Feed, CP Bangladesh Company and Oryza Agro Industries Ltd are also the strong competitors of Master Feed Agrotec.
Md Kabir Hossain, managing director of Master Feed Agrotec, told The Business Standard, "We produce quality products for poultry and fish. The company's both projects are situated in its lands; that is why we do not have a big loan."
He said they want to raise the capital from the stock market only for the company's business expansion.
"If we can complete the projects, we will provide the customers with all kinds of poultry and fish feeds," added Md Kabir.
He expects that the number of customers will increase three to four times.
"We want to set up a fully automatic chicken farm aimed at reducing production cost and getting the best quality. So, hopefully, we will do better in the future," said the Master Feed managing director.
The company's authorised capital was Tk100 crore. The paid-up capital was Tk57.15 crore and the post paid-up capital was Tk87.15 crore.
The company was incorporated in 2011 as "Master Hatchery and Poultry Feed Limited". Later in 2018, it was renamed as "Master Feed Agrotec Limited".
According to the Feed Industries Association Bangladesh, the feed manufacturing industry has grown up gradually in the country, and it saw annual growth of 15- 18 percent for years.
There are 201 feed factories registered with the Department of Livestock Services.
The annual demand for poultry feed in Bangladesh is around 6.3-6.4 million tonnes, and it is expected to rise to 6.5-7 million tonnes in 2021.
At present, the amount of imported poultry and fish feed is almost at zero level. Some 98 percent of the total demand is being met by the local commercial production. The remaining 2 percent is still handmade.
Asian Tiger Capital Partners Investments Ltd and NBL Capital & Equity Management Ltd are working as issue managers of Master Feed Agrotec Limited.