Union Bank, Krishibid Feed get IPO nod

The Bangladesh Securities and Exchange Commission on Sunday approved the prospectuses for initial public offering of Union Bank Limited and Krishibid Feed Limited through Qualified Investor Offer.

The stock market regulator approved the prospectuses at a meeting held at its headquarters. BSEC chairman Prof Shibli Rubayat-Ul-Islam presided over the meeting.

Union Bank, the fourth-generation Islamic Shariah based bank to raise Tk 428 crore under the fixed price method. The bank will offload 4.28 crore ordinary shares for Tk 10 each.

This will be the largest initial public offering in the country’s banking sector. Meanwhile, among all sectors, Union Bank’s IPO is going to be the fourth largest after Robi Axiata’s Tk 523 crore, Grameenphone’s Tk 486 crore and Mobil Jamuna’s Tk 460 crore.

Net proceeds from the IPO will be used for SME financing, purchase the government’s securities, investing in the capital market and cater the IPO expense.

According to the financial statement ending December 31, 2020, the company’s net asset value (NAV) per share was Tk 16.38, while earnings per share (EPS) were Tk 1.82.

Prime Bank Investment Limited and BRAC EPL Investment Limited will play the role of issue managers.

The bank must be invested in the capital market Tk 200 crore within 2021, as per the Bangladesh Bank circular.

Incorporated on March 7, 2013, the bank is going public to comply with a regulatory requirement.

Currently, the number of listed banks is 32 on the Dhaka bourse. After 12 years of a bank’s listing, the Bangladesh Securities and Exchange Commission approved the IPO proposal of NRB Commercial Bank and South Bangla Agricultural Bank.

At the commission meeting, the BSEC also approved Krishibid Feed Limited’s IPO, another small and medium enterprise (SME) to enter the stock market.

The stock market regulator instructed to issue Tk 22 crore worth of ordinary shares in favor of Krishibid Feed.

The company will raise funds for bank loan repayment, purses machinery, and issue management costs with a face value per share of Tk 10 to investors.