Regulator rejects Bonito Accessories Industries IPO | The Business Standard
Skip to main content
  • Home
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Food
    • Habitat
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • TBS Graduates
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Long Read
    • Interviews
    • Offbeat
    • Tech
    • Magazine
  • বাংলা
The Business Standard

Monday
December 04, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Food
    • Habitat
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • TBS Graduates
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Long Read
    • Interviews
    • Offbeat
    • Tech
    • Magazine
  • বাংলা
MONDAY, DECEMBER 04, 2023
Regulator rejects Bonito Accessories Industries IPO

Stocks

Salah Uddin Mahmud
17 August, 2020, 09:00 pm
Last modified: 17 August, 2020, 09:16 pm

Related News

  • China's fast-fashion retailer Shein files for US IPO: sources
  • India's Tata Technologies' $365 mln IPO oversubscribed within hours of first day of bids
  • Banglalink eyes IPO in two years
  • Best Holdings IPO bidding starts 20 November
  • Packaging firm Kalyar Replica to go public

Regulator rejects Bonito Accessories Industries IPO

It wanted to raise Tk30 crore through the fixed price method to acquire machinery, construct a building and repay loans

Salah Uddin Mahmud
17 August, 2020, 09:00 pm
Last modified: 17 August, 2020, 09:16 pm
Photo: Collected
Photo: Collected

Highlights

  • Company wanted to raise Tk30 crore through IPO
  • Revenue was Tk45.62 crore as of June 2019
  • Net profit was Tk5.04 crore as of June 2019
  • EPS declined by 34.03% in June 2019 compared to 2018
  • EPS was Tk1.26 in June 2019

The Bangladesh Securities and Exchange Commission (BSEC) has rejected the initial public offering (IPO) application of Bonito Accessories Industries Limited for violating securities rules.

It wrote to the company and the issue manager concerned on Monday in this regard.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Bonito Accessories Industries is a 100 percent deemed export-oriented garment accessories manufacturer and exporter.

The principal activities of the company include manufacturing, processing, printing, cutting, sealing and assembling of all kinds of button, elastic, hanger, polybag, PVC bag, gum tape, sewing thread, hang tag, bar code, back board, paper board, photo card, label etc.

The company wanted to raise Tk30 crore from the capital market through the fixed price method to acquire machinery, construct a building and repay loans.

Sources said the company violated the rules and overstated in its financial statements so that investors would be more interested in buying its shares.

The company did not buy the land where the building would be constructed using the IPO fund. The regulator thinks this contradicts the use of IPO proceeds and indicates misstatement.

The company has overstated its sales by increasing accounts receivable from 2015-16 to 2018-19. As a result, its future profitability will fall, said the regulator.

The share capital of the company was Tk1 crore in June 2016. As it wanted to go public quickly, its share capital was increased to Tk40 crore within a short period.

But the company did not use the full capital under private offer. 

After that, the company applied to the commission to raise Tk30 crore through initial public offering. In this regard, it failed to submit the pre-IPO supporting documents to the commission.

The company showed that it has a long-term bank loan of Tk2.26 crore and Tk1.66 crore in cash. But it wanted to repay loans of Tk3 crore, which was shown in IPO proceeds. 

The regulator observed that the company overstated its operating income by understating operating expenses. The company showed that the combined amount of its administrative expenses and distribution expenses was Tk1.78 crore against its revenue of Tk45.61 crore as of June 30 last year.

At the same time, the company paid remuneration of Tk2.21 crore to all its directors and officers.

The company's net income ratio was shown as 11.04 percent, which was higher than average in the textile sector.

The regulator also opined that the company's audited financial statements failed to give a true and fair view in all material respects.

Besides, the company will shortly have a significant impact of Covid-19 pandemic on its profitability, which can also put the shareholders at risk.

Earlier, the regulator also rejected the IPO applications of five other companies – Beka Garments and Textile Ltd, JMI Hospital Requisite Manufacturing Ltd, SF Textile Industries, B Brothers Garments Co Ltd, and BD Paints Ltd – for showing inflated revenues and profits.

It was found that these companies had inflated revenues and profits, and overstated inventories and assets in their financial statements.

BMSL Investment Ltd, CAPM Advisory Ltd and EBL Investments Ltd are the issue managers of Bonito Accessories.

The issue manager sources claimed that the commission had recently rejected some IPO applications. But all the issues are being cancelled without prior discussion, or informing the issue manager and company officials concerned.  

If the regulator observes any shortcoming in documentations, it may seek explanations from the companies. But rejection of several issues within a short time will discourage issue managers from bringing new companies to the capital market.

Economy / Top News

Bonito Accessories Industries / IPO

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Photo: TBS/Salahuddin Ahmed
    November's overall export earnings increase by 27% from previous month
  • Photo: TBS
    Bangladesh to provide labour updates to US soon: Commerce secy
  • Wang Dehai splurged on a S$23 million ($17.2 million) condominium in the prime Orchard area. Photographer: Ore Huiying/Bloomberg
    How suspects laundered billions in Singapore for years

MOST VIEWED

  • Paperfly founders set to buy out foreign investor's entire stake
    Paperfly founders set to buy out foreign investor's entire stake
  • Representational Image of the MV Madhumati. Photo: Collected
    Dhaka-Kolkata maiden private cruise ship reaches Kolkata
  • 5 renewable power projects on cards to counter global fuel price surge
    5 renewable power projects on cards to counter global fuel price surge
  • LPG cylinders. Photo: Courtesy
    12kg LPG cylinder price up Tk23
  • Proposed insider trading rule change raises concerns about stock manipulation
    Proposed insider trading rule change raises concerns about stock manipulation
  • Photo: Collected
    Indonesia volcano erupts, spews ash 3 km into sky

Related News

  • China's fast-fashion retailer Shein files for US IPO: sources
  • India's Tata Technologies' $365 mln IPO oversubscribed within hours of first day of bids
  • Banglalink eyes IPO in two years
  • Best Holdings IPO bidding starts 20 November
  • Packaging firm Kalyar Replica to go public

Features

Masud Ahmad has written one of the finest Bangla novels in recent times, titled ‘Kanchanfuler Kobi,’ centred around the life and works of eminent poet Jibanananda Das. Photo: Rajib Dhar

How little-known Masud Ahmad became the 'Shera Bangali'

7h | Panorama
Designed for utility, the D90 is a giant in comparison to other MG models and misses out on design elements which gives the other models their sporty stance. Photo: Akif Hamid

Maxus D90: Spacious, capable and practical

21h | Wheels
Maria Callas: Remembering the soprano diva on her century

Maria Callas: Remembering the soprano diva on her century

Now | Features
Photo: Touseful Islam

Last sip of coffee with cats: Bidding adieu to Capawcino

23h | Features

More Videos from TBS

Euro champion Italy in 'Group of Death' with Spain and Croatia

Euro champion Italy in 'Group of Death' with Spain and Croatia

18h | TBS SPORTS
Will Israel kill expatriate Hamas leaders after the war?

Will Israel kill expatriate Hamas leaders after the war?

17h | TBS World
How Shanto is carving out his own legacy as captain

How Shanto is carving out his own legacy as captain

6h | TBS SPORTS
Mahiya Mahi, Dolly Sayantani and Hero Alam's candidacy canceled!

Mahiya Mahi, Dolly Sayantani and Hero Alam's candidacy canceled!

20h | TBS Stories
EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]