Janata submits Tk 1,000cr IPO plan

Janata Bank has submitted a Tk 1,000 crore IPO plan to the market regulator for approval.

The state-owned commercial bank put forward its IPO (initial public offering) prospectus to the Securities and Exchange Commission (SEC) early this week, said a senior SEC official.

The bank's IPO, if approved, will be the largest public offering that will surpass the Grameenphone's offering of Tk 972 crore including IPO and pre-IPO.

The bank will raise the amount through floating one crore ordinary shares of Tk 100 each at an offer price of Tk 1,000 that shows Tk 900 as premium per share.

With the existing paid-up capital of Tk 375 crore, the bank has sought the premium considering its high net worth fundamentals such as asset value, earnings and brand value.

As of December 31 of 2008, the bank's net asset value per share was Tk 350 and earning per share was Tk 121.

ICB Capital Management Ltd is the issue manager of Janata Bank IPO.

Janata, the second biggest commercial bank after Sonali, will be the second state bank to be listed on the stock exchanges with Rupali Bank being the first.

The bank was turned into a public limited company in November 2007 in a bid to bring more efficiency and transparency in its activities.

The two other state-owned commercial banks -- Sonali and Agrani -- also became public limited companies at the same time with the same purpose.

Janata, which was nationalised in line with Bangladesh Bank (Nationalisation) Order 1972 immediately after the country's independence in 1971, has now 849 branches across the country.

However, it may not be so easy for Janata Bank to get SEC nod, as the market regulator is now stuck in indecision over such approval following a government decision on IPO floatation.

The finance ministry at a meeting on November 5 decided that from now a company will have to go for IPO with minimum shares equivalent to 40 percent of its paid-up capital. The SEC has also been directed to go by the new decision.

The restriction has already pushed at least four companies' IPOs into uncertainty with Janata Bank being the latest.

RAK Ceramics, Beacon Pharmaceuticals, LSI Industries and Industrial and Infrastructure Development Finance Company Limited (IIDFC) have been awaiting a nod from the regulator for months after submitting their IPO prospectuses.