- The cut-off price will be determined by the book-building method
- General investors will get a 20% discount on the cut-off price
- The firm cannot approve any inter-company loan from now on
JMI Hospital Requisite Manufacturing Ltd on Tuesday received approval from the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk75 crore from the capital market.
The modern medical instrument and hospital equipment manufacturer in Bangladesh will collect the fund from stock market investors by issuing an initial public offering (IPO) under the book-building system.
It will spend the fund on purchasing machinery and land as well as loan repayment.
Now, the company will have to determine the cut-off price of its shares from institutional investors and publish a vetted IPO prospectus.
After getting the cut-off price, the company will issue shares to the general public at a 20% discount on the price.
The cut-off price is the price point where institutional investors absorb all the primary shares allocated for them in an IPO under the book building method.
JMI Hospital Requisite Manufacturing Ltd has a trading and distribution business of other medical instruments.
The factory of the company is situated at Gazaria, Munshiganj. More than 500 employees are working in the company.
The company had earlier applied to the commission for IPO. But in July 2020, the commission rejected the application as the company failed to comply with the regulatory requirements.
Besides, the Investment Corporation of Bangladesh (ICB) invested Tk81 crore as a placement share of JMI, which was bought at a premium.
But ICB Capital Management Ltd was also the issue manager of the company, along with Janata Capital and Investment Limited.
According to the law, an issue manager cannot hold shares of its issuer company.
On 30 June 2020, the net asset value per share of the company was Tk27.78 without revaluation and Tk29.99 with revaluation.
Five years' weighted average earnings per share of the company were Tk2.42. Its paid-up capital is Tk90 crore.
The company will not be able to approve inter-company loans. It will not be able to recommend any dividend, its approval, and distribution before it gets listed on the stock market.