IFAD Autos to set up new assembly line

IFAD Autos plans to invest Tk 50.68 crore to set up an assembly unit in March for buses and trucks in Savar to tap into the growing market for commercial vehicles.

The company will import engines from Ashok Leyland, the second largest commercial vehicles maker in India, for assembly in Bangladesh, said Mir Fatema Akter, chief financial officer of the company. It will also set up a body building unit, she said.

The company has raised Tk 63.73 crore from the stockmarket to expand business and repay bank loans, Akter said.

The automobile dealer floated 2.12 crore ordinary shares worth Tk 10 each at an offer price of Tk 30, including Tk 20 in premium, according to the initial public offering prospectus.

Bangladesh Securities and Exchange Commission gave permission to raise money from the public in September last year. The company will pay Tk 9.33 crore in loans from the IPO fund, it said.

IFAD will assemble commercial vehicles such as goods trucks, dump truck, air-conditioned buses, deluxe buses and prime movers, Akter said.

It will resume assembling operations in the first half of 2016, she said.

The company is estimated to assemble 960 units of 'tusker super-1613h trucks' for the first year after resuming operations, according to the prospectus. The body building unit's capacity will stand at 840 vehicles a year, it said. The company generated a turnover of Tk 815 crore last year.

Presently, the company has sales outlets in Dhaka, Khulna, Rajshahi, and Chittagong divisions, covering the districts of Jessore, Faridpur, Mymensingh, Rangpur, Comilla and Sylhet.

The company has 25 distributors across the country.

Nitol Motors is the market leader with a 40 percent share, followed by IFAD at 38 percent, Runner Motors at 10 percent and others at 12 percent.

The company's earnings per share as of June last year stood at Tk 5.16 with a revalued net asset value of Tk 44.12 per share.

gazitowhid@thedailystar.net