Lovello gets BSEC nod to raise Tk30cr through IPO

The securities regulator has approved the Initial Public Offering (IPO) proposal of Lovello Ice Cream, an ice cream brand of Taufika Foods and Agro Industries Ltd (TFAIL), to raise Tk30 crore by issuing 3 crore shares in the capital market.

Bangladesh Securities and Exchange Commission (BSEC) approved the IPO on Wednesday at a meeting held at its office, according to a press release.

Each share of the company will have a face value of Tk10.

Out of the IPO fund, Lovello will invest Tk9.04 crore for acquiring a plant and machineries, Tk5.78 crore for freezers, and Tk2.06 crore for vehicle purchase.

Also, the company will invest Tk1.32 crore for capacity expansion of its depot and Tk9 crore to repay bank loans. The remaining Tk2.8 crore will be used to meet IPO costs.

AKM Zakaria Hossain, company secretary of TFAIL, told The Business Standard, "The demand for Lovello products is increasing every day because of its quality."

The market share of the company is approximately 15% in the ice cream industry. Of its total sales, Dhaka division accounts for 50%.

As of 30 June 2020, the company's net profit was Tk6.21 crore, which was Tk6.16 crore in the previous year.

During the period, its net revenue was Tk94.29 crore, which was Tk92.29 crore in the previous year. Its earnings per share (EPS) was Tk1.31.

Banco Finance and Investment Limited and Sandhani Life Finance Limited are working as issue managers of the company for its IPO process.

Taufika Foods and Agro Industries kicked-off its commercial operations on 2 January 2016. Its paid-up capital is Tk55 crore.

The company's Lovello brand was launched on 14 February 2016.

The ice cream market in Bangladesh is valued at Tk1,200 crore.

Igloo and Polar are two established names in the industry, holding 66% market share.

Currently, Igloo, the market leader, holds 38% share.