FE Report
KDS Accessories Ltd (KAL) got off to a flying start on its debut on the DSE and CSE Thursday.
The share price of the company increased more than fourfold on the DSE despite sluggish market sentiment on the opening day.
The share price of the company, offered at Tk 20, hovered between Tk 64 and Tk 93.5 on the DSE before finally closing at Tk 85.8, gaining 329 per cent.
A total of 5.37 million shares changed hands on the Dhaka Stock Exchange (DSE).
At Chittagong Stock Exchange (CSE), each share of the company was traded between Tk 99 and 80 and closed at Tk 84.8, gaining 324 per cent from its issue price of Tk 20.
A total of 1.35 million shares changed hands on the CSE.
It also dominated the top turnover and top gainers' list on the DSE and CSE with shares of Tk 457.70 million and Tk 115.58 million respectively changing hands on the day.
The analysts said the newly-listed issue is sometimes used as an "instrument" for short-term speculation, and many investors want to bet on the shares for short-term gain.
"So, it created hype among the investors on the first day of trading".
KDS Accessories, which received regulatory approval from the Bangladesh Securities and Exchange Commission (BSEC) in May last, floated 12 million ordinary shares of Tk 10 each at an offer price of Tk 20, with a premium of Tk 10.
The Chittagong-based trims and packaging manufacturer raised Tk 240 million from the public through initial public offering (IPO).
According to the company's IPO prospectus, the authorities of the company are using Tk 150 million raised through IPO for expansion of its packaging unit and Tk 70 million for repaying the bank loans and Tk 20 million as IPO expenses.
It is the 32nd listed firm in the engineering sector that accounts for 5.5 per cent of the DSE's total market capitalisation.
The company has reported post-tax profit of Tk 63.17 million and basic EPS Tk 1.58 in January-June period of 2015 as against post-tax profit of Tk 40.52 million and basic EPS of Tk 1.01 for the same period a year ago.
However, considering the post-IPO 52,000,000 shares, the basic EPS of the company would be Tk 1.21 for six months period ended on June 30, 2015 and NAV per share would be Tk 22.63.
The company's paid-up capital is Tk 520 million and authorised capital is Tk 2,000 million.
Of the total shares, 76.92 per cent is owned by sponsor/directors, while 2.31 per cent by institutions and 20.77 per cent by the public, according to the DSE website.
KDS Accessories, a sister concern of Chittagong-based KDS Group, is engaged in producing different types of textile accessories like cartons, labels, tags, printings, narrow fabrics, heat transfer printings and button, according to the company's prospectus.
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