Subscription was extended as many investors failed to subscribe to the IPO due to the Covid-19 pandemic
The Initial Public Offering (IPO) subscription for shares of Express Insurance has been extended to July 2.
Its subscription expired on June 18.
Company officials said many investors failed to subscribe to the IPO due to the Covid-19 pandemic. That is why the subscription has been extended with the securities regulator's approval.
Earlier, the company's IPO subscription date was set on April 13. But it could not receive applications on that day due to general holidays.
Express Insurance secured approval from the Bangladesh Securities and Exchange Commission (BSEC) to go public with a condition to invest at least 20 percent of its IPO fund in the capital market. It will deposit 74 percent of the fund in banks.
As per the approval, the insurer will raise a capital of Tk26 crore through offloading 2.6 crore ordinary shares at an offer price of Tk10 each under the fixed price method.
A market lot consists of 500 shares and an investor needs Tk5,000 to apply for each lot of the company's IPO shares.
AAA Finance and Investment, IIDFC Capital, and BLI Capital are working as issue managers of Express Insurance.
From the IPO fund, Express Insurance will invest Tk2 crore in treasury bonds, Tk1 crore in mutual funds and Tk2.21 crore in the secondary market of the stock exchange.
The remaining Tk19.36 crore will be kept in fixed deposit receipts in banks.
Set up in 2000, the company's authorised capital is Tk75 crore, and paid-up capital stands at Tk39.11 crore.
Md Abdul Awal, chairman of Express Insurance, is also holding the post of the managing director of Synthia Securities, a brokerage firm.
Besides, Express Insurance's Vice-Chairman Mahfuza Younus is holding the post of the chairman of Sonali Papers and Board Mills.
Sonali Paper is currently staying outside the main market of the Dhaka Stock Exchange because of its poor business performance. But it has secured permission from the securities regulator to come back to the main market of the country's prime bourse.
The revenue of Express Insurance has been stagnant for the last five years. The figure was Tk42 crore in 2014, which came down to Tk40 crore in 2018.
Due to an increasing operating cost, the net profit of the company has decreased by 49 percent during the five-year period. Its net profit was Tk4.38 crore in the financial year 2018.