Emerald Oil Industries yesterday made a flying trade debut on the Dhaka Stock Exchange by becoming the top gainer and turnover leader of the day.
Each share of the company closed at Tk 50 on the premier bourse, up 400 percent from the initial public offering (IPO) price of Tk 10, according to the DSE website.
Some 68.79 lakh shares worth Tk 36.13 crore were exchanged on the trading floor, which is around 10.68 percent of the total turnover of Tk 338 crore.
“A newly listed security is sometimes considered as an instrument for short-term speculation, and many investors want to bet on the shares for short-term gain,” said Md Moniruzzaman, managing director of IDLC Investments, a merchant banker and a security analyst.
“So, it created hype among the investors on the first day of trading.”
Emerald Oil is the 19th listed company in the food and allied sector that accounts for about 8 percent of the total market capitalisation on the premier bourse.
Earlier on November 19 last year, the Bangladesh Securities and Exchange Commission green-lit Emerald to raise Tk 20 crore through IPO.
The company is using the IPO proceeds to pay off loans and meet up working capital.
The company has reported net profits of Tk 3.31 crore for the half year of 2013-14 with earnings per share (EPS) of Tk 1.23, down from Tk 3.67 crore and Tk 1.36 respectively in the same period a year ago.
However, considering post-IPO shares, the company's EPS would be Tk 0.70 and net asset value per share would be Tk 13.04 as on December, the DSE said in a web posting.
Emerald Oil makes rice bran oil by processing rice bran collected from local rice mills.
The company markets its edible oil under its own brand name of Spondon oil, according to the IPO prospectus of Emerald Oil.
The company's product portfolio also includes de-oil bran, fatty acid, wax and gum obtained as by-products from the production of rice bran oil.