Baraka Patenga IPO bidding deferred

The bidding to fix the share price for an initial public offering (IPO) of Baraka Patenga Power Limited has been deferred.  

The bidding – a requirement for going public under the book-building method – will now take place between 5pm on 22 February and 5pm on 25 February on the Dhaka Stock Exchange, said sources. 

It was originally scheduled for 15 to 18 February. The stock exchange has changed the bidding date following an application by the company, added the sources.

According to the book-building process rules, institutional investors will bid to set a reference price for Baraka Patenga shares, and the general public will later apply for the same at a 10% discount.  

On 5 January, Baraka Patenga received approval from the Bangladesh Securities and Exchange Commission (BSEC) to explore the price of its primary shares in order to raise Tk225 crore from the market.

The company will utilise part of its IPO proceeds of Tk144.34 crore to invest in two of its power generation subsidiaries – Karnaphuli Power Ltd and Baraka Shikalbaha Power Ltd. 

The remaining funds will be used to repay loans and bear expenses of the IPO process, the BSEC said in a statement.

LankaBangla Investments Ltd, a leading local merchant bank, is the issue manager of the Baraka Patenga IPO.

The BSEC also decided that the company cannot further increase its paid-up capital by issuing bonus shares within the next five years. Also, the company must hold at least 51% shares of its two subsidiaries, according to the regulator.

At the end of fiscal 2019-2020, Baraka Patenga's net asset value (NAV) per share stood at Tk23 without asset revaluation surplus added. The company's NAV per share was Tk20.98, excluding that of its subsidiaries.  

In the last fiscal year, the company's consolidated earnings per share (EPS) stood at Tk4.37, which was Tk1.84 on a solo basis. The five-year weighted average of the company's consolidated EPS was Tk3.30, which was Tk2.82, if profits of subsidiaries were excluded.

Baraka Group, primarily a venture of non-resident Bangladeshis, began its journey in the mid-2000s to develop a modern residential area in Sylhet.

The group went into the power generation business more than a decade ago and its first power venture – Sylhet Barakatullah Electrodynamics, now Baraka Power Ltd – is listed on both bourses.

The group also expanded its business into apparel exports, and collaborated with globally renowned technical partners and financiers – such as the World Bank Group's International Finance Corporation – which helped the group grow further in the sector of power generation.

Baraka Patenga Power owns a 50MW power plant – located in Patenga, Chattogram – which started a commercial run in May 2014. Baraka Power owns 51% shares of Baraka Patenga.

Baraka Patenga is now working to strengthen its subsidiaries, both of which are already in operation but are still awaiting improvement of their equity structures in order to avail necessary loans.

Baraka Shikalbaha, a 105MW heavy fuel oil-based power plant, came into production in May 2019, while Karnaphuli Power, a 110 MW plant, started generating power in August.