JMI Hospital’s cut-off price set at Tk25

The cut-off price per share of JMI Hospital Requisite Manufacturing Ltd has been fixed at Tk25 through electronic bidding.

The Dhaka Stock Exchange (DSE) on Sunday disclosed the cut-off price through the electronic subscription system (ESS) of Bangladesh.

Qualified and institutional investors including mutual funds will buy 25% of the company's shares at the cut-off price.

Meanwhile, 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 initial public offering (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, primarily for purchasing land and machinery, and for loan repayment.

JMI Hospital Requisite Manufacturing Ltd has a trading and distribution business of other medical instruments. 

The company had earlier applied to the BSEC 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 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 issue manager of the company.

On 30 June 2020, the net asset value per share of the company 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 can neither recommend nor approve nor distribute any dividend before getting listed on the stock market.