Showing attractive business performance, Bashundhara Paper Mills issued shares in the stock market at Tk. 80 each to eligible investors and Tk. 72 each to general investors. However, after coming to the stock market, the profit of the company, which was previously trading at 69 crores, has now fallen to 19 crores. However, the production capacity of the company increased by 30 thousand metric tons through financing from the stock market.
Bashundhara Paper has reported a net profit of Tk. 1.10 per share in the financial year 2023-24 of Tk. 19 crore 11 lakh. The amount of which before withdrawing money from the stock market in the financial year 2017-18 was 4.63 taka per share, totaling 69 crore 36 lakh taka. That is, after withdrawing money from the stock market, the profit has decreased by 50 crore 25 lakh taka or 72 percent.
In the first year of the company’s entry into the stock market, there was a big decline in business. The profit of the company, which was traded in the stock market at the beginning of 2018-19 financial year, fell to 29 crore 19 lakh taka in that financial year.
The company raised Tk. 200 crore by issuing each share in the stock market at Tk. 80 to qualified investors and Tk. 72 to general investors. Against this investment, the business shareholders will not receive any dividend for the financial year 2023-24. Because the board of the company has not declared any dividend for that financial year.
However, according to the approved budget of the financial year 2018-19, the companies listed in the stock market should pay at least 30 percent of the profits to the shareholders in the form of dividends. If less than 30 percent is paid, the entire portion transferred to retained earnings or retained in the company is taxed at the rate of 10 percent.
As a result of the government’s decision to keep 100 percent of the profits in the company without complying with the provision, Bashundhara Paper will have to pay an additional tax of 10.91 million taka at the rate of 10 percent on top of the 19.11 million rupees sought to be retained earnings.
Bashundhara Paper came to the stock market in book building through issue manager AAA Finance and Investment. The company faced controversy at the very beginning of its IPO over the overvaluation of the cut-off price. In this case, however, there are allegations of active and artificial cooperation of the issue manager and some qualified investors. The share is now below the issue price.
After trading on Monday (October 28), the company’s share price stood at Tk. 27.80. As such, the investment in the company is now at loss instead of capital gain.
This information is known from the website of Dhaka Stock Exchange (DSE).
