First-ever pro-rata share allocation among public on Monday

The Dhaka Stock Exchange (DSE) will hold an event at its training centre on Monday to allocate primary shares of Sonali Life Insurance among general investors on a pro-rata basis for the first time. 

Through the event to be held at 11 am, the capital market is going to abandon the lottery system to allocate primary shares among general investors. 

Investors will be entitled to buy primary shares in proportion to what they applied for while the ratio will be based on the total of offered shares and subscriptions.  

Pro-rata would calm down initial public offering (IPO) hunters to some extent, believe experts. 

Sonali Life Insurance IPO subscription began on 30 May and ended on 3 June. 

Investors' subscriptions were received by the electronic subscription system (ESS) of the DSE and the pro-rata allocation would also be accomplished through the same platform while lottery draw programmes were being conducted by third-party service providers. 

Investors need to have at least Tk20,000 crore invested in the secondary market and they must subscribe to at least Tk10,000 or up to five multiples thereof in IPO.

On 9 December last year, the regulator gave the company approval to raise Tk19 crore from the stock market by issuing 1.9 crore shares through IPO.

The shares were offered to the public at a face value of Tk10 each.

The company will invest the fund in government securities, fixed deposit receipts (FDRs), and the secondary market.

According to the company's audited financial report for the year that ended on 31 December 2019, its net asset value per share was Tk25.47, excluding revaluation, and life insurance fund stood at Tk95.33 crore.

The authorised capital of Sonali Life Insurance, which was incorporated on 7 July 2013, is Tk100 crore.

Currently, its paid-up capital is Tk28.5 crore and post-IPO paid-up capital will be Tk47.5 crore.

The company has more than 76 branches and service centres across the country.

It has no subsidiary and does not belong to a holding company.

ICB Capital Management and Agrani Equity and Investment are working as the issue managers of the company for its IPO process.

As per the stock market regulator's decision, institutional investors with a minimum of Tk1 crore investment in stocks can subscribe to the shares of the company through the ESS.

Besides, institutional investors of recognised pension funds and provident funds with a minimum of Tk50 lakh investment in stocks will also be able to subscribe to the shares in the same way.

There are 78 companies – 32 life and 46 non-life – in the insurance sector of Bangladesh.

Out of the 32 life insurance firms, 29 are private, two are foreign, and one is state-owned.