Delta Hospital to go public

Delta Hospital plans to go public by using the book building method to raise Tk 50 crore for its business expansion and bank loan repayment.

Of the IPO proceeds, Tk 31.09 crore will be used for machinery procurement, Tk 16.66 crore for bank loan repayment and the rest Tk 2.25 crore for IPO expenses.

The hospital will hold a roadshow for institutional investors at Dhaka Regency Hotel and Resort at 7pm today as part of its plan for initial public offering (IPO).

Eligible investors such as merchant banks, asset management companies, stock dealers, banks, financial institutions, insurance companies, alternative investment fund managers and other institutions approved by the securities regulator will join the event.

A roadshow is a requirement under the book building regulations before the price discovery of a company's shares.

The book building is a process through which an issuer attempts to determine the price to offer for its security based on demand from institutional investors.

The price of an IPO share is determined through automated bidding joined by financial institutions.

The shares are then opened for the IPO participants at the cut-off price. The method was suspended and then revised by the regulator following the 2011 market crash.

If Bangladesh Securities and Exchange Commission gives go-ahead to the IPO, Delta will be the second listed hospital after Samorita Hospital, which entered the stockmarket in 1997.

Prime Finance Capital Management is the issue manager of the IPO of Delta Hospital. The issue manager will display the hospital's fundamentals to the eligible institutional investors during the roadshow. Delta Hospital has a paid-up capital of Tk 33.21 crore.

The hospital's net profit stood at Tk 6.18 crore with basic earnings-per share Tk 1.88 at the end of June this year, while the net asset value per share stood at Tk 40. It started commercial operation in 1989 as Delta Medical Centre and changed its name to Delta Hospital in 2007.

Delta Hospital provides general medical treatment facilities with specialisation in oncology.