ADN will raise Tk 570 million through the book building method, Bangladesh Securities and Exchange Commission said in a statement on Tuesday after approving the proposal at a meeting.
IPO proceeds will be used for balancing, modernisation, rehabilitation and expansion or BMRE, the construction of a new data centre and loan repayment, according to the company’s prospectus.
As per the book building method, the company will now discover the cut-off price of its shares through completing electronic bidding.
Under the electronic bidding process in which only the institutional investors are allowed to participate, the cut-off price of the shares of an IPO-seeking company is set, based on the bids submitted by investors. Individual investors get scope for purchasing the shares at 10 percent discounted rate through IPO in line with the method.
ADN Telecom with Tk 448.6 million in paid-up capital has a reputation as a front-line service provider in the sector, providing customers at home and abroad with data, voice and internet services.
Its net profit almost doubled in four years to Tk 105.93 million in fiscal 2016-17, according to the prospectus.
Return on assets rose to 8.56 percent in fiscal 2016-17 from 8.21 percent a year ago. It gives an idea about how the company’s management has efficiently used its assets to generate earnings.
On the other hand, return on equity or ROE has edged down to 14.64 percent in fiscal 2016-17 from 14.76 percent a year ago. ROE measures the company’s profitability by revealing how much profit it has generated with the money shareholders have invested.
The company’s capital structure with debt accounting for 25 percent and equity finance taking up 75 percent shows its inner strength. The debt to equity ratio here indicates that the company depended less on loans than on equity investment in fiscal 2016-17.
At the end of FY2017, the company was valued at Tk 1.24 billion. The company’s directors and entrepreneurs own 73.29 percent of its 44.86 million shares. The rest is owned by various individuals and institutions.
Earnings per share, another indicator of the company’s profitability, rose to Tk 2.52 as of June 30, from Tk 2.1 a year ago. Net asset value, which refers to total assets minus total liabilities divided by the number of its shares outstanding, increased to Tk 16.13 per share as June 30, compared to Tk 14.2 a year ago.