Bidding for price discovery under book building method of LankaBangla Securities Limited (LBSL) is expected to begin in early September, said officials Monday.
The company, country's leading brokerage firm, will offload more than 37 per cent share in the stock market to diversify its business. If approved by the Securities and Exchange Commission (SEC), it will be the first listed brokerage firm.
"We'll submit necessary documents next week for seeking approval of the securities regulator for beginning bidding process," said Nasir Uddin Chowdhury, chief executive officer of LBSL. "If everything goes well, bidding for price discovery might start in early September," he added.
In line with book building regulations, before price discovery the company held an IPO roadshow to woo the eligible institutional investors in a city hotel Monday.
In response to a question about the company's addressing risk factors in a falling market as its core business is based on stock trading, CEO of LBSL said, "Our liabilities will be minimised after IPO as the bank borrowing will reduce, which will help get a good return."
"Besides, other than equity market, half of the raised capital will be invested on bond market, which will also help popularize it," he said adding that twenty per cent of fund will be put on strategic investment and rest on equity market and other purposes
In reply to another question from an institutional investor, he promised to insert risk factors and their mitigations in the company's prospectus.
Mafizuddin Sarker, managing director of LankaBangla Finance Ltd (LBFL), described the company's financial strength and its future prospects, while Mohammad A Hafiz, director of AAA Consultants and Financial Services that acts as issue manger, explained the company's growth and book building procedure.
The brokerage firm whose existing paid-up capital is Tk 550 million will float 30 million ordinary shares of Tk 10 each. After the IPO, its paid-capital will reach Tk 850 million.
Eligible investors will bid for 20 per cent of total ordinary shares.
It is a subsidiary company of listed LBFL, which is a leading joint venture non-banking financial institution between local and Sri Lankan entrepreneurs.
The brokerage house in terms of turnover bagged the top position in the fourth consecutive year in Dhaka Stock Exchange and fifth consecutive year in Chittagong Stock Exchange.
Last month, its daily average turnover was more than Tk 2.0 billion on DSE.
Listed in 2006, the LBFL having a 99.99 per cent stake in LBSL is a joint venture financial institution established with multinational collaboration.
LBSL started operations in the capital market in 1997. Now it has eight branches across the country with 1600 clients, and two more branches are in the pipeline.
source: the financial express
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