Shasha Denims rises by 6pc on debut day

FE Report

Shasha Denims Ltd failed to attract investors on its trading debut on the stock market Thursday as the company's share price increased only 6.0 per cent.

Each share of the company traded between Tk 50 and Tk 36.9 on the Dhaka Stock Exchange (DSE) before closing at Tk 37.1 from its issue price of Tk 35, according to the DSE website.

Some 9.18 million shares worth Tk 358.63 million were exchanged on the DSE trading floor, which is around 13.46 per cent of the total turnover of Tk 2.66 billion.

At the Chittagong Stock Exchange (CSE) - each share of the company traded between Tk 45.9 to Tk 36.8 before closing at Tk 37.1, which was 6.0 per cent increased from its issue price of Tk 35. A total of 2.24 million shares changed with a value of Tk 87.44 million.

"Debutant Shasha Denims could not attract investors much as the company's earning disclosure disappointed the investors," said an analyst.

High premium and ongoing political turmoil in the country also discouraged the investors to take position, he said.

The company has reported basic earning per share (EPS) Tk 0.98 for nine months period (January'14 to September'14) and net asset value (NAV) per share Tk 45.68.

"Shasha Denims posted relatively lackluster performance compared to recent IPOs, advancing by only 6.0 per cent at the day end, faltering on disappointing quarterly declaration," said IDLC Investments.

The Denims producers, which received regulatory approval from the securities regulator in October last year, floated 50 million ordinary shares of Tk 10 each at an offer price of Tk 35, including Tk 25 as premium and raised a fund worth Tk 1.75 billion from public.

Shasha Denims is the 39th listed firm under the textile sector on the DSE that accounts for around 3.50 per cent of the DSE's total market capitalisation.

IPO fund is being used for expanding business, repay bank loans and bear the expenses of the IPO proceedings.

AFC Capital and Imperial Capital acted as issue manager of the Shasha Denims's IPO.

Shasha Denims Ltd (SDL) is one of the leading denims fabric producers in Bangladesh since 2000. SDL is located at Dhaka Export Processing Zone (DEPZ), according to the company's IPO prospectus.

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