Bangladesh Securities and Exchange Commission yesterday gave a green light to Dragon Sweater and Spinning to raise Tk 40 crore from the public.
The export-oriented spinning and sweater manufacturing company plans to float four crore ordinary shares of Tk 10 each.
Swadesh Investment Management will manage the initial public offering, the proceeds of which would be used to purchase machinery and spare parts, and meet working capital.
The last five years' weighted average earnings per share of the company stood at Tk 1.33 and net asset value per share at Tk 18.79. The approval came at a meeting presided over by BSEC Chairman Khairul Hossain, the commission said in a statement.
Presently, 42 companies are listed under the textile sector that accounts for around 4 percent of Dhaka Stock Exchange's total market capitalisation.
Dragon Sweater supplies to global brands such as Walmart, K-Mart, Macy's, C&A, Zara and Primark, according to the company's website.
The stockmarket regulator also gave a go-ahead to Acme Laboratories, a pharmaceutical company, to determine its IPO price through institutional bidding using the book-building method.
Book-building is a process through which an issuer attempts to determine the price to offer for its security by gauging the demand from institutional investors.
Institutional bidding is a must to determine the indicative prices of each share before the IPO.
Acme will offload five crore ordinary shares of Tk 10 each through book-building and the raised funds will be used for setting up three new plants in Savar.
The company's earnings per share, as of June 2014, stood at Tk 5.65 and net asset value per share at Tk 66.16.
It is the third firm that is using the book-building system after the stockmarket regulator modified the pricing rules. ICB Capital Management is the issue manager.
At yesterday's meeting, the BSEC also approved a Tk 10-crore open-end mutual fund, which will be managed by Peninsula Asset Management Company.
Bangladesh Development Bank—the sponsor of the fund styled Peninsula AMCL BDBL Unit Fund One—will contribute Tk 2 crore to the fund, while the rest will be raised from the public. An open-end mutual fund is a professionally managed collective investment scheme that has an unlimited lifetime and size.
The fund manager pools money from many investors through sales agents and invests in stocks, bonds and short-term money market instruments and pays out dividends to the unit holders annually.
The regulator also approved the draft of the amendment to public issue rules and mutual fund rules that will be posted on the commission's website, and published in national dailies for public opinion before finalisation.