LankaBangla Securities plans to go public

LankaBangla Securities Ltd, a subsidiary of LankaBangla Finance Ltd, plans to go public using book building method within the next three months.

If the regulator gives a go-ahead, the company will be the second one after RAK Ceramics to go for IPO (initial public offering) using the book building method, a modern pricing system for IPO.
The brokerage firm will float three crore ordinary shares of Tk 10 each, officials said.

“The raised fund will be used for business expansion and diversification,” Mohammed Nasir Uddin Chowdhury, chief executive officer of LankaBangla Securities, told The Daily Star yesterday.

He said the company may go for strategic investment in other companies, participate in bond market and effectively activate dealership activities.

“We want to help strengthen the supply side of the stockmarket, which is now in need of new shares,” Chowdhury said.

The board of LankaBangla Securities, 99.99 percent owned by LankaBangla Finance, took the decision of going public under book building system at a meeting on Monday.

“If we get the regulator's approval, we hope to complete the IPO process within the next three months,” Chowdhury added.

The existing paid-up capital of LankaBangla Securities, which recommended 104.25 percent stock dividend including previously declared 63.40 percent interim dividend for 2009, is Tk 50 crore.

The company performed best on the country's two bourses in terms of turnover in 2009, and now has seven branches across the country -- three in Dhaka and Chittagong each and one in Sylhet.

On Monday's meeting, its owning company LankaBangla Finance also recommended 15 percent cash dividend and 20 percent stock dividend (20 shares for every 100 shares) for 2009.

LankaBangla Finance has also announced consolidated profit after tax of Tk 74.40 crore with consolidated EPS (earnings per share) of Tk 16.81 for the year ended on December 31, 2009 against Tk 37.76 crore and Tk 8.53 respectively as of December 31, 2008.

The company made net profit of Tk 35.09 crore with EPS of Tk 7.93 for the year ended on December 31, 2009 against Tk 16.63 crore and Tk 3.76 respectively as of December 31, 2008.

Following the corporate disclosures, share prices of LankaBangla Finance rose by 5.7 percent to Tk 372.60 yesterday.

LankaBangla Finance is a joint venture financial institution established with multinational collaboration. Sampath Bank of Sri Lanka, First Gulf Asia Holdings, and local entities such as One Bank, SSC Holdings and Shanta Apparels have stakes in LankaBangla Finance.

Source: The Daily Star, February 17, 2010