The initial public offering (IPO) subscription of JMI Hospital Requisite Manufacturing Ltd will begin tomorrow and continue till 3 March.
Earlier, institutional investors fixed the cut-off price of the company's shares at Tk25 each through electronic bidding.
Qualified and institutional investors, including mutual funds, will buy 25% of the company's shares at the cut-off price.
Individual investors will be able to purchase the remaining shares at Tk20 per share, i.e., at a 20% discount on the cut-off price.
The cut-off price is the price at which institutional investors get all the primary shares allocated for them in an IPO under the book building method.
The company's electronic bidding under the book building method took place for 72 hours – from 5pm on 9 January to 5pm on 12 January.
During this period, 385 institutional and eligible investors offered to buy the company's shares at a range of rates. Most bids were received for Tk25.
The highest bidding price was Tk25, while the lowest was Tk16.
The company will collect Tk75 crore from investors, mainly for purchasing land and machinery, and for repaying loans.
JMI Hospital Requisite Manufacturing Ltd has a trading and distribution business of medical equipment.
The company had earlier applied to the Bangladesh Securities and Exchange Commission for IPO. But in July 2020, the commission rejected the company's application as it failed to comply with the regulatory requirements.
Besides, the Investment Corporation of Bangladesh (ICB) invested Tk81 crore as a placement share in 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 in its issuer company.
Now, only Janata Capital and Investment Limited is working as the company's issue manager.
On 30 June 2020, the company's net asset value per share was Tk27.78 without revaluation and Tk29.99 after revaluation.
Five years' weighted average earnings per share of the company stood at Tk2.42. Its paid-up capital is Tk90 crore.
The company will not be able to approve inter-company loans.
Besides, it cannot declare any dividend before getting listed on the stock market.