Stock investors to get more stake in Power Grid

The Bangladesh Power Development Board (BPDB) will offload more shares of Power Grid Company of Bangladesh, providing stock investors with an opportunity to buy more stake in the state-run firm.

The BPDB had earlier sold a 15.36% stake of the power transmission company in 2006 when it got listed on the stock exchanges. 

As per the instructions of the government, now the corporate sponsor of Power Grid has to offload another 9.64% or a little more than 6.87 crore shares out of the total of over 60.32 crore. 

In the last three months from 21 December to 13 March, the BPDB has already sold more than 3.43 crore shares.

Now, it will sell the remaining over 3.43 crore shares by 29 April at the prevailing market price.

In October last year, the BPDB received the approval of the finance ministry to offload the shares of the Power Grid to increase participation of general investors.

Normally, the sponsors and directors of a listed company get 30 days to off-load or sell its shares after its announcement to do so.

But, the BPDB sought 90 days from the Bangladesh Securities and Exchange Commission (BESC) to avoid any possible impact on the prices for selling such a big quantity of shares at a time.

After getting the approval of 90 days, the BPDB has completed the first phase of sales of shares. Again, it has expressed the intention to sell the rest of the shares.

On Thursday, the closing price of the Power Grid shares stood at Tk44.10 per share, which was 4.34% lower than the previous day.

When the company started to sell its shares, in mid-January, Power Grid's share price rose from Tk42.5 to Tk59.5 on 1 January. After that, the share price gradually went down.

In October last year, general investors – including institutional and foreign ones – held a 15.36% and sponsors and directors an 84.64% of the shares of the Power Grid Company.

In this, institutional investors own a 12.21%, foreign investors 0.15% and general shareholders 3%.

As of February 2021, after completing the first phase sales of shares, shareholding by general investors has increased from 15.36% to 19.9% and sponsors and directors' holding decreased from 84.64% to 80.10%.

In this, institutional investors hold 14%, foreign investors 0.13% and general investors 5.77% of the Power Grid shares.

In the 2019-2020 fiscal year, the company posted a profit of Tk317.41 crore and earnings per share (EPS) stood at Tk4.45. It has declared a 20% cash dividend for the shareholders.

The profit of the company is 17% lower than the previous year. In the fiscal year 2018-2019, the profit was Tk384 crore and the company paid a 20% cash dividend.