Libra Infusions declares highest ever dividend after share price doubles

TBS Illustration

Libra Infusions Limited, in its board meeting held last Thursday, declared the highest dividend for the fiscal 2020-21. But prior to this declaration, its share price at the Dhaka bourse on Thursday's trading session had doubled from what it was more than three months ago.

The publicly listed saline manufacturer recommended a 30% cash dividend only for its general shareholders, and 50% stock for all shareholders.

Its shares that were trading at Tk668.7 each on 11 July, jumped to Tk1,346.1 last Thursday.

Also, on Sunday, its share price soared 19% within the first hour of trade, as there was no limit to share price movement on the first trading day after dividend declaration. Finally, the shares closed at Tk1,419 apiece, 5.42% higher compared to the previous session.

The upward momentum of the stock started this July, based on the rumour that the company is going to declare a big stock dividend, said a senior official at a brokerage firm.

"Till 19 October, its share price jumped over 112% at the DSE. Apparently, the rumour was right, meaning that some investors were aware about the dividend announcement which indicated an unlawful insider trading," he added.

Meanwhile, Libra said in its price sensitive statement that it declared the stock dividend for complying with the minimum paid-up capital requirement of Tk30 crore.

The company further informed that the stock dividend will be disbursed after obtaining the approval from the Bangladesh Securities and Exchange Commission (BSEC).

The company is set to hold its annual general meeting (AGM) on 30 November, which will take place through a digital platform, ensuring convenient participation for its shareholders.

At the end of the July-March period of the fiscal year 2020-21, it incurred a loss of Tk0.97 crore. But in the fourth quarter of that year, it earned a net profit of Tk0.99 crore, which offset the previous quarters' losses and helped the company to post profit.

In September 2023, Libra Infusions informed the Bangladesh Competition Commission in a meeting that the company has slashed its production by 75% due to shortage of working capital, just as the demand for injectable saline has surged significantly following the record-smashing dengue outbreak.

Currently, Libra Infusion is producing only 25,000 bags daily, against its capacity of 100,000.

Company Secretary Shafiqul Islam Bhuiya told The Business Standard earlier, "We are unable to operate at full capacity due to a lack of operating capital. Currently, we are producing saline at only 25% of our capacity as we have not secured loans from banks. Access to a bank loan would enable us to utilise our full production capacity."

In 2018, its business declined owing to disputes with its lender Al-Arafah Islami Bank Ltd over repayment of loan.