Walton’s generosity towards its retail investors amid hard times

Walton Hi-tech Industries usually offers several types of discounts on its products round the year. But this time, the high-flying company has come up with a discount on its share price, in a move not seen by the country's bourse before.

The move comes to give relief to general shareholders amid the raging coronavirus pandemic.

The local electronics giant has already discovered its cut-off price for each share at Tk 315 through bidding of eligible investors as it plans to go public.

General investors usually buy shares at 10 per cent lower than the cut-off price in the initial public offering (IPO), according to the listing regulations. As a result, Walton's share price would stand at Tk 283 for the general shareholders.

"We are giving the general shareholders an additional 10 per cent discount," Abul Bashar, chief financial officer of Walton, told The Daily Star.

This means, each share would cost Tk 252 for the retail investors.

As small investors have been affected in recent times due to the pandemic, the company has decided to provide the discount, Bashar said.

The electronics-maker has sent a letter to the Bangladesh Securities and Exchange Commission seeking approval to offer the lower price.

To implement the discount, Walton will have to offload another 1.69 lakh shares.

In total, the company would make 15.48 lakh shares available for general investors as it looks to raise Tk 39.3 crore from the public.

Another 13.79 lakh shares will be offloaded to the eligible investors for Tk 60.7 crore. After listing with the bourse, sponsors' shareholding would be 99.03 per cent, while the rest 0.97 per cent would be off-loaded.

Walton has a huge potential in the upcoming years, so it received a good premium during the bidding, said Partha Protim Das, its company secretary.

The cut-off price has been set by the bidding of eligible investors after a rigorous analysis, he said.

As the premium is high, the number of shares that would be offloaded is low, Das said.

"Such positive attitude is unprecedented in Bangladesh," said an asset manager requesting anonymity.

All issuers should follow Walton's lead and think of giving some relief to investors, he added.

Walton's foray into the local electronics market dates back to 1997, when it started importing black-and-white television sets.

Years later, it started assembling TV sets, along with motorcycles, and it continued until 2010, when it began manufacturing them.

Today, Walton is in manufacturing, retailing, designing and exporting of its products and appliances including air conditioner, freezer, multi-stage freezer and automobile.

It employs more than 20,000 people in its 22 production bases. It has the capacity to produce 10 million units, according to the company's website.