Ifad Autos’ stocks jump on Tk 80cr investment plan

Shares of Ifad Autos Ltd jumped 4.42 per cent at the Dhaka Stock Exchange yesterday after it announced its plan to invest Tk 80 crore in one of its sister concerns.

The board of the listed automobile company decided to make the investment to acquire 40 per cent shares of Ifad Multi Products Ltd. The fund would be mobilised from the company's own fund, Ifad Autos said in a regulatory filing.

Ifad Multi Products is one of the sister concerns of Ifad Group having common management.

The share purchase will be implemented after securing permission from general shareholders.

"We have decided to invest in the company to ensure diversification," said a director of the company, preferring anonymity.

"Ifad Multi Products is a profitable company so shareholders will be rewarded with higher benefits."

Set up in 2003, Ifad Multi Products is a consumer food producer. It began its journey by setting up an automated flour mill.

The company has established itself as a supplier of salt, both consumer and industrial grade, according to its website.

Currently, the company is a major manufacturer and supplier of instant noodles, stick noodles, biscuits and cookies, spices, and bottled drinking water.

Ifad Autos imports finished vehicles from Ashok Leyland of India and sells them in Bangladesh. It also brings in CKD (completely knocked down) cars and assembles them locally.

It sells Farmtrac-branded agriculture machinery and spares from Escorts Limited, an Indian automotive engineering company that operates in the sectors of agri-machinery, construction machinery, material handling, and railway equipment, and markets them in Bangladesh.

Sales of Ifad Autos stood at Tk 657 crore in the nine months to March 31, down from Tk 685 crore a year earlier.

During the same period, it logged profits of Tk 54.9 crore, an increase of 13 per cent year-on-year.

In another disclosure, Ifad Autos said it inked an agreement with the Bangladesh Economic Zones Authority (Beza) for the lease of 30 acres of land as a rental basis for 50 years at the Bangabandhu Sheikh Mujib Shilpa Nagar in Mirsarai, Chattogram.

The company plans to establish a manufacturing and assembly plant for motorcycles, a factory for automotive components, and a blending plant for machine lubricants.

The annual rent is $303,514. Ifad Autos paid $607,029 as the security deposit to the Beza.