Krishibid Feed’s products seeing rise in demand

Krishibid Feed Limited (KFL), a sister concern of Krishibid Group, is indirectly contributing to healthier poultry, cattle, and fish and promoting safe consumption of meat, which has an increasing demand, according to a study of BRAC EPL Stock Brokerage Limited.

It has an annual feed production capacity of 38,800 million tonnes, while its capacity utilisation level was 55.85 per cent in FY21.

The company is a manufacturer and distributor of all kinds of poultry, fish, and cattle feeds.

Krishibid Feed is entering the stock markets through Qualified Investors Offer (QIO) on the SME platform. The QIO will close for subscription on Thursday.

The feed maker will offload 2.2 crore shares on offer for sale at Tk 10 per share for all qualified investors.

Through this, they will raise Tk 22 crore from the capital market’s SME platform, and the money raised would build a factory building, repay bank loans, and buy machinery, diesel generators and delivery vans.

In 2020, due to the disruption caused by the Covid-19 pandemic, the KFL experienced 5.6 per cent decline in sales revenue, 3 per cent decline in operating profit, and subsequently an 11.7 per cent decline in net profit.

The company during the July-December period last year registered revenue of Tk54 crore that resulted in a half-year net profit of Tk4.6 crore in 2020.

The company has reported earnings per share (EPS) of Tk 1.67 and net asset value without revaluation reserve of Tk 18.47, according to the company's financial statements ended on December 31, 2020.

Currently, Krishibid Feed’s authorised capital is Tk 75 crore and pre-QIO paid-up capital is Tk 27.5 crore.

Its total interest-bearing loans stood at Tk 1,17 crore in FY20, according to the study of BRAC EPL.

The feed company has never declared a cash dividend. It declared a 50 per cent stock dividend for the year ended June 30, 2018.

As per BSEC’s requirement, it cannot issue a stock dividend for three years after it is listed on the SME platform.

According to the Bangladesh Poultry Industries Central Council, in Bangladesh, the market size of commercial feed production stood at 5.03million tonnes, with an estimated market turnover of USD 2.5 billion.

Over the last two decades, large poultry, cattle, and fish farms involved in commercial production have been gaining prominence.

According to the Council data, the total number of registered feed mills is 261 while more than 200 feed mills are unregistered as of 2021.

Nourish Poultry Feeds, ACI, Kazi Farms, Provita Feed, Aftab Feed, New Hope Feed, and Aman Feed are the top incumbents in the industry, and cumulatively hold 70 per cent of the total market share. Other major competitors of KFL are National Feed and Quality Feeds.

KFL operates as a mid-sized player in the industry, pursuing a cost leadership strategy. Among the types of feeds manufactured, poultry feed holds 63 per cent of the market share, whereas cattle feed and fish feed hold 14 per cent and 23 per cent respectively.

Earlier, September 5 this year, the Bangladesh Securities and Exchange Commission (BSEC) approved the company's proposal for raising Tk 22 crore through QIO as a small and medium enterprise (SME).

Krishibid Feed was incorporated on November 09, 2010, as a private limited company and started commercial operation from January 01, 2012. It was converted into a public limited company on April 03, 2017. The factory of the company is located in Bhaluka at Mymensingh.