The IPO subscription begins on January 14, 2024 and lasts until January 18
The Bangladesh Securities and Exchange Commission (BSEC) has raised the hurdle in retail investors' initial public offering (IPO) applications for allotment of shares for Best Holdings Limited – the owner of the five-star Le Méridien Hotel.
Investors in Best Holdings' IPO can now apply for shares without any value restrictions as the regulator has removed the standard cap of Tk10,000 usually imposed on an investor in IPO applications.
As per BSEC's new guidelines, an investor applying for an IPO in the primary market will have to make a minimum investment of Tk 50,000 in the secondary market.
Due to the changes, the Dhaka Stock Exchange (DSE) has conducted an awareness program with the representatives of brokerage houses and directed them to follow the new guidelines.
In October 2023, Best Holdings received BSEC approval to raise Tk 350 Crore from the capital market through an IPO under book building method.
The IPO subscription begins on January 14, 2024 and lasts until January 18.
To apply for the company's IPO shares, Bangladesh resident general investors must have a minimum investment of Tk 50,000 in maturing listed securities and non-resident Bangladesh investors (NRBs) must have an investment of Tk 1 lakh as of January 3, 2024.
Earlier, the electronic bidding for the company's shares was held between November 20 and 23, with the cut-off price of the shares set at Tk 35 per share.
Qualified and institutional investors, including mutual funds, will purchase 25% of the company's shares at the cut-off price.
Individual investors can purchase the remaining shares at a 30% reduced price of Tk 24 each.
The cut-off price is the price at which primary shares are allocated to institutional investors in an IPO using the bookbuilding method.
According to the company, Best Holdings will use 50% of the fund or Tk 176 crore for building and other construction works, 33% or Tk 115.6 crore for repayment of existing liabilities and around 13% for local acquisition of machinery and equipment.
Best Holdings is in the process of raising fresh funds to build a resort in Bhaluka upazila in Mymensingh.
The cost of the entire project, which will offer world-class hospitality outside the capital, is Tk 1,586.91 crore, according to the prospectus. To this project, the company's IPO and fund will contribute Tk 755 crore and the rest will come from loans.
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