Price bidding based on the book building method to fix the share price of Delta Hospital Ltd's Initial Public Offering (IPO) will begin at 5:00pm on March 22 at the Dhaka Stock Exchange in the capital.
The company is engaged in general medical treatment, and in cancer diagnosis, treatment and management in the private sector in Bangladesh.
The Bangladesh Securities and Exchange Commission (BSEC) has allowed the company to start bidding to set the cut off price. The company is expected to collect capital worth Tk50 crore in this electronic bidding process.
However, based on the amended book building method, any company has to raise at least Tk75 crore as capital.
The BSEC officials said the IPO rules were revised in September last year. Since Delta Hospital had applied before the rule was revised, BSEC approved its IPO on special consideration.
In the prospectus of the company, Delta Hospital claims that it will spend the fund to repay debts and to buy cancer treatment equipment.
At present, the paid-up capital of the company is Tk33.21 crore.
The company's last financial year report shows that it gets 28 percent of its total revenue from the sale of medicines and vaccines. Around 17 percent from pathology, 15 percent from LINAC therapy, and 12 percent from seat rent.
The company also earns revenue from other sources such as diagnostics, service charge, chemotherapy, and from doctors' fees.
In last four financial years, the company has gradual growth in terms of revenue. The annual revenue growth was 11 percent.
In 2018-19 financial year, it had a revenue of Tk65.33 crore.
As of December 31, 2019, the company had a long-term loan worth Tk85.45 crore from NCC Bank. Shareholders equity is Tk155.68 crore.
In the first half of the current financial year, the company's revenue increased by seven percent to reach Tk34.16 crore. The net profit has also gone up by five percent to reach Tk3.39 crore.
Prime Finance Capital Management Ltd is the issue manager for the company while ICB Capital Management Ltd is the registrar to the issue.
The company started off in 1989 as Delta Medical Centre. In 2007, the company changed its name to 'Delta Hospital Ltd.'
The hospital has two units, one in the Mirpur area and the other in the Uttara area of the capital.
Initially, the company started with 100 beds, and this gradually increased to 250 beds in 1994 , and then to 400 beds.
The company plans to increase bed capacity to 500, and it received a license to do so on January 21, 2016 from the Directorate General of Health Services.
The proposed project envisages setting-up a modern specialised hospital with a capacity of 150 beds. The initial cost of the proposed hospital project has been estimated at Tk185.22 crore.
The chief financial officer of Delta Hospital, Md Bakbul Islam, told The Business Standard, "We hope the investors will not face any financial loss."