Walton IPO subscription gets huge investors’ response

Small and general investors got back their confidence to invest in the capital market centering a recent Walton initial public offering (IPO) subscription offer.

With the aim of applying for an IPO subscription, a good number of people opened beneficiary owner (BO) accounts, and many investors reactivated their accounts.

According to a press release issued, investors crowded in the brokerage houses amid the pandemic to apply in Walton IPO subscription during Walton Hi-Tech Industries' IPO subscription from 9 to 16th August.

Such scenarios were found in many of the capital's brokerage houses, including EBL Securities, Prime Bank Securities, Joytun Securities, Shahjalal Islami Bank Securities and Banco Securities.

Stakeholders think that a few factors, such as being a leading electronics company in the local market, continuous business growth, well record of earnings per share and net asset value lured investors into Walton's IPO subscription, the press release said.

Authorities of brokerage houses informed, many BO accounts became inactive as investors were reluctant due to the long absenteeism of the reputed companies' IPO as well as the continuous deterioration of the market.

Many of those inactive BO accounts were reactivated centering the start of Walton's IPO subscription. A good number of new investors also applied in the Walton IPO subscription through opening BO accounts for the first time, the press release claimed.

Ataur Rahman, an investor of Joytun Securities, said, "I lost confidence to invest in the capital market witnessing the market's deterioration and no IPO issues of any reputed company. But I regained my confidence seeing the start of Walton's IPO subscription." 

Md Sayedur Rahman, managing director of EBL securities said, "General investors responded extensively to the Walton IPO subscription for the company's strong financial and business performance." 

Bangladesh Securities and Exchange Commission (BSEC) approved the IPO proposal of Walton Hi-Tech to raise a fund worth Tk1 billion in capital form by issuing ordinary shares on June 23, the press release reads.

As per the BSEC approval, eligible investors will get the company's shares at the cut-off price of Tk315 each, fixed earlier through the country's first-ever electronic bidding process.

According to the Dhaka Stock Exchange sources, total 233 were selected eligible among the investors applied in Walton IPO subscription.

Among the eligible investors, 167 applied for each share of Walton at the cut-off price. The remaining 66 eligible investors were counted eligible for their proposal above the cut off price for each share during the bidding process.

General investors have been able to apply for an IPO for a maximum of Rs 5,040 against a BO account, comprising 20 shares.

The general investors applied in Walton IPO subscription at Tk252 for each share, a 20 percent discount on cut-off price, as the company gave 10 per cent additional discount considering the interest of the capital market and small investors.

The IPO proceeds will be utilised for expansion of the company's businesses, repay bank loans and meeting the IPO related expenses. AAA Finance is in charge of issue manager of the company, the press release said. 

As per the company's financial statement as of June 30 of 2019, WHIL's Net Assets Value (NAV) with revaluation reserve per share was recorded at Tk243.16 and its Earnings Per Share (EPS) was Tk45.87. 

It was known that Walton Hi-Tech is going to be listed in the capital market with the highest EPS recorded during the IPO, the press release further said.