Modern Poly set to go public

Modern Poly Industries Limited, a concern of business conglomerate TK Group, is set to raise fund from the stockmarket for business expansion.
The Chittagong-based company will float three crore ordinary shares of Tk 10 each using book building method, a modern pricing mechanism for initial public offering (IPO).
With IPO proceeds, the company will acquire a 95 percent stake in Modern Fibre Industries Limited, a sister concern of Modern Poly Industries. It will also use a portion of the fund to repay bank loans and the rest will be added to its working capital.
“We have already submitted a draft prospectus of the IPO to the Securities and Exchange Commission for its consent to commence bidding to discover cut-off price for each share,” said Abul Bashar, chairman of Modern Poly Industries.
“Another objective of going public is to involve general public in our businesses and share the profit with them."
Pointing out that doing business after investments with bank borrowing is very difficult, as high interest has to be paid for the loan, Bashar said, “We will not require paying any interest if we raise funds from the stockmarket.”
Modern Poly Industries, the paid-up capital of which is Tk 50 crore, will organise a roadshow today to display the company's key facts to the institutional bidders.
Organising road show is required by the book building regulations, before price discovery of a company's share.
During the road show, Alliance Financial Services Limited, the issue manager of the IPO, will present Modern Poly Industries' information, fundamentals, valuation, indicative price and so on to the eligible institutional investors.
Indicative price for each Modern Poly share has already been fixed at Tk 64. Now under book building method, the eligible institutions will be allowed to quote 20 percent up or down from the indicative price for each share. It means the investors will be allowed to offer prices between Tk 51.20 and Tk 76.80.
Modern Poly Industries, which diluted earnings per share as of 2009 was Tk 2.52, established in 1999 as a fully export-oriented company that manufactures “Partially Oriented Yarn” (POY) and “Drawn Texturised Yarn” (DTY) products.
Entrepreneurs of the company are also involved in other businesses such as hatchery, power generation, insurance, synthetic yarn and trading.
Modern Poly Industries is the fourth company that announced its intention to go public using the book building method.
This mechanism was introduced last year to attract large and profitable companies to be listed on bourses.
RAK Ceramics, a UAE-Bangladesh joint venture, is the first company that uses book building for IPO. After RAK, LankaBangla Securities Limited and Alliance Holdings Limited have announced share offloading under book building.

BEACON PHARMA IPO APPROVED

The Securities and Exchange Commission at a meeting yesterday gave consent in principle to Tk 30 crore IPO by Beacon Pharmaceuticals.
Beacon, the paid-up capital of which is Tk 190 crore, will offer three crore ordinary shares of Tk 10 each In another move, the SEC has decided to make it mandatory for newspaper advertisement before setting indicative price of a share under book building method.
Presently, the indicative price of a share is set through bidding by any five institutions from three categories and there is no need for prior advertisement in the newspaper.
But the stockmarket regulator thinks that the bidding process for setting the indicative price of a share may be influenced.
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