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RAK Ceramics (Bd) Ltd Ipo Introduced Under 'Book design' First Time in Bangladesh

RAK Ceramics (Bd) Ltd Ipo Introduced Under 'Book Building Method 'First Time in Bangladesh. The Securities and Exchange Commission, the regulator gave the green light to the RAK at a meeting on Wednesday, officials said. The tiles and sanitary-ware maker will float three crore shares worth Tk 10 each at face value under the bookbuilding method. A target price for each shares RAK has already been recorded in the TC 40 by bidding built of seven institutions from four sectors. Now in the price discovery phase, bidders do not quote 20 per cent more or less than the target price, ie it is between Tk 32 and Tk 48 for each share offer. The fixing of the price required to obtain a license. Prime Bank, Southeast Bank IFIC Bank and is the target price bids from the banking sector. Prime Finance LankaBangla and Finance will participate as non-financial institutions, insurance companies as insurance Mercantile Company and Royal Green Securities as a broker company.

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"We will start working for pricing after receiving written approval from SEC. We hope to complete the work in January," Arif Khan, Chief Executive Officer and Managing Director (current charge) of IDLC Finance, told The Daily Star. IDLC Finance is leading the issue, Managing Director of RAK Ceramics IPO, while BRAC-EPL is Co-Issue Manager. The institutions are not allowed to sell shares in the first 15 trading days after the lock-in system. RAK is the paid-up capital is Tk 195 crore. At 30 June was to share the company of the Net Asset Value Tk 18 a and earnings per share stood at Tk 1.99. Foreign traders even 90 percent of the company, while local entrepreneurs the rest yourself, but local ownership is 20 percent after the IPO. RAK started their business in Bangladesh in 2001. The company currently holds about 80 per cent market share in sanitary-ware and 35 percent in the ceramic market. PRICE DISCOVERY The book-building method, a widely practiced price-fixing mechanism for the IPO was launched in March, with the aim to promote the private sector entrepreneurs to its large and profitable companies on stock exchanges at a fair price list. In accordance with the bookbuilding process, institutions for shares, by the discovery of the price bid. A weighted average based on the highest and the lowest price and stocks are solid institutions on the weighted average allocation price. The lowest price is a cut-off price for public offer or general investors. RAK Ceramics, a UAE-Bangladesh Joint Venture has begun the process under book-building process, press the country's stock market.

It is the first company to debut on Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE), is using such modern pricing mechanism for Initial Public Offering (IPO) have been put in March of last Year.

As part of the process, the tiles and sanitary-ware manufacturer had an IPO road show to woo the eligible institutional investors in a city hotel Saturday. RAK received primary approval for floating shares from the securities regulator in December.

Within the next three weeks it will start, to sell shares among institutional investors after receiving the approval of the SEC in the bidding. Institutional bids will be executed by DSE and CSE.

Subscription for general investors will open 25 days from the closure of the institutional offer.

Chairman of RAK Ceramics (Bangladesh) Khater Massaad described the company as the prospects and the future plan to impress the institutional investors.

"We are very proud to come in Bangladesh feel," said Massaad. A large number of people and growing per capita incomes have been demands for the creation of products that attracted us to invest primarily in the growing market of Bangladesh he said.

He said: "meet the local demand, the company has already started to export products to India, Sri Lanka and Nepal and plans to enter the European market. "

IDLC Finance is leading the issue, Managing Director of RAK Ceramics IPO, while BRAC-EPL Investments Ltd. is a common problem manager.

Arif Khan, Deputy Managing Director of IDLC Finance Ltd, presented the company's financial strength, while Saiful Islam, director of the EPL-BRAC, explains the logic of the company's target price and described the bidding process.

Mr. Arif also a response to the flood of questions from the institutional investors on the financial side of the company asked.

DSE President Md Rakibur Rahman and local investors Ekramuzzaman SAK, the 10 percent of the RAK Ceramics holds, also spoke in the road-show program.

RAK has 34.51 million shares valued at Tk 10 a par value below the book-building process. Of these, 20 percent will come from institutional investors, 10 percent of investment funds, 10 percent will be financed by non-resident Bangladeshis and 60 percent by the public.

A target price for each RAK stock has already been recorded at TK 40 built, including a premium of Tk 30, by tender of seven institutions from four sectors.

According to the book design, bidders can not quote 20 per cent more or less than the target price, that is, they have to offer between 32 and Tk Tk 48 for each share. The Fixing the indicative price is required to obtain a license.

At 31 December 2009, RAK's pre-IPO paid-up capital is Tk 1.86 billion. The Company net asset value was Tk 13.69 a share and earnings per share (EPS) was Tk 1.83.

Foreign traders even 90 percent of the company, while local Entrepreneur the rest of itself, but the local ownership will increase to 20 percent for post-IPO.

RAK started commercial operation in Bangladesh in late 2000. At present The company has market share more than a quarter of the tiles and more than three quarters of the sanitary ware products. Book Building is a method determined by the companies Values of their IPOs on the tender prices of the eligible institutional investors. The SEC led the way in March with the aim to promote the private sector Operators to its large and profitable company with stock exchanges at a fair price list.

It is the process that is determined by the price of institutional investors on the basis of an indicative price offered by the issuer company.

With the method, the Issuer will first ask for company stock prices, from institutional investors by organizing road shows, conference and seminar projection on the company.

Then the firm in cooperation with its Issue Manager will fix an indicative price to be offered on the prices by at least five institutions in three categories, send, and support it to the securities regulator and stock exchanges.

Based on the indicative price, the institutions will offer for the shares.

However, the bidders could not quote more or less 20 percent from the target price. Then, a weighted average price determined on the basis of the higher and lower prices, and shares will be for the institutions on the weighted average be allocated.

The bottom is a cut-off price for public tenders or open when they are viewed.

The institutions are not allowed, shares in the first 15 trading days to sell his building under the title lock-in system. Book to encourage construction companies to win market book-building method, a new system of modern pricing mechanism for IPOs would encourage companies to win the exchanges, as it ensures fair pricing of Initial Public Offerings (IPO).

This was President of Dhaka Stock Exchange (DSE) Md. Rakibur Rahman at a seminar on "book-building process and IPO" at a city hotel today told here.

He said the book-building method will play an important role in promoting their companies list, said in a statement.

Book Building is a method by which companies determine the values of their IPOs on the offer data rates from institutional investors.

RAK Ceramics (Bangladesh) a Bangladesh-UAE joint venture, organized the seminar. Managing Director of RAK Ceramics SAK Ekramuzzaman gave acceptance speech.

A multimedia presentation on the Girl book-building process was shown at the seminar, entered including by the chairman of RAK Ceramics, Dr. Khater Massaad.

Massaad said that RAK would in a large industry in Bangladesh are turned. He said the book-building method could generate huge employment opportunities for unemployed youth of the country, if it is given to an appropriate meaning.

The RAK Ceramics (Bangladesh) will offer the first primary shares using the bookbuilding method. The joint Venture company already has the approval of the Security Exchange Commission was in this context.

M. Shahidul Islam,

Company Secretary

RAK Ceramics (Bangladesh) Ltd.

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