Investors show higher enthusiasm on newly listed ACME Laboratories shares
Published : 16 Jun 2016, 10:59:34
The ACME Laboratories dominated the turnover on the Dhaka Stock Exchange (DSE) since made debut on June 7, as investors grabbed its shares amid optimism.
“The investors showed higher enthusiasm surrounding newly listed ACME Laboratories amid short-term speculation. So, it created hype among the investors,” said an analyst at a leading brokerage firm.
According to statistics from the DSE, some 28 million shares of ACME were traded, generating a turnover of Tk 3.33 billion in the last seven trading days since its debut on June 7.
Price of share of ACME, the country’s oldest pharmaceutical company, hovered between Tk 113 and Tk 118 in the last seven days against its initial public offering (IPO) price of Tk 77 each.
ACME Laboratories, which received regulatory approval from the Bangladesh Securities & Exchange Commission (BSEC) in February, floated 20 million ordinary shares of Tk 10 each with a premium of Tk 67 through an initial public offering (IPO) for the general and affected investors, and non-resident Bangladeshis.
Before the IPO, ACME offloaded 25 million shares through bidding for the institutional investors and 5.0 million for mutual funds at Tk 85.2 each.
ACME is the second firm that is using the book-building system after the stockmarket regulator modified the pricing rules following the market crash in 2011.
Book-building is a process through which an issuer attempts to determine the price to offer for its security by gauging the demand from institutional investors.
The ACME will utilise the IPO fund to implement three new projects at Dhamrai in Savar, along with bearing the cost of IPO expenses, according to the company’s IPO prospectus.
“ACME is among the three companies just behind market leader Square Pharmaceuticals in sale of medicines in Bangladesh,” said Md Zahangir Alam, chief financial officer of ACME Laboratories.
ACME controls 8.0 percent of the domestic market share and exports 70 types of drugs to 20 countries.
“Compared to last year, our sales have gone up by 15 per cent until June, 2014. We export five percent of the total sale”. “The expansion will increase the company’s revenue and profit,” he added.
The company has posted a 10.37 percent rise in earning for nine months (July 2015 to March 2016) period. The company has reported profit after tax of Tk 724.14 million and basic earnings per share (EPS) of Tk 4.48 in nine months as against Tk 656.08 million and basic EPS of Tk 4.06 for the same period of the previous year.
However, considering Post-IPO 211,601,700 number of shares, the company’s basic EPS would be Tk 3.42 for nine months period ended on 31 March 2016 and net asset value (NAV) per share would be Tk 73.85 as on 31 March 2016.
ACME is the 28th listed firm in the pharmaceuticals & chemicals sector that accounts for 16 percent of the premier bourse’s total market capitalization.
ACME’s paid-up capital is Tk 2,116.02 million and authorised capital is Tk 5,000 million, while the total number of securities is 211,601,700. The company’s total market cap stood at Tk 24,588.12 million as on Tuesday.
The sponsor-directors own 57.64 percent stake in the ACME, while institutional investors own 32.36 percent and the general public own 10 percent as on June 30, 2015, the DSE data showed.
ACME is engaged in manufacturing and marketing of generic pharmaceuticals formulation products, including human, veterinary and herbal drugs. The products of the company are sold in domestic as well as international markets, according to the company’s website.
The pharmaceutical sector is technologically the most developed manufacturing industry in Bangladesh, the second largest industry in terms of contribution to the government’s exchequer and 21th largest market-cap listed company on the DSE.
The sector is now one of the fastest growing sectors in the country, with its average growth rate coming to 17.2 percent over the last five years and 13.1 percent over the last decade.
The market growth in 2011 was 25 perent, with approximately Tk 90 billion in revenues.
ACME Laboratories expects the pharma market size to exceed Tk 150 billion by 2016 and subsequently, wants to take advantage of the business opportunities.
The history of ACME Laboratories dates back to 1954, when a proprietorship firm was founded at Chashara in Narayanganj on a three-bigha land with around 33 people to manufacture drugs.
The firm relocated its plant to Dhamrai in Savar on a land of 10 acres after converting into a private limited company in 1976. Commercial operations at the modern plant began at the end of 1983.