Asiatic Laboratories to go public for business expansion

Asiatic Laboratories Limited, a medium-sized pharmaceuticals company, wants to raise Tk95 crore with an initial public offering (IPO) under the book building method.

The drugmaker will spend the IPO proceeds on implementing new projects at its existing factory premises in Gazipur.

The business entity, which has established its brand in Bangladesh over the last 50 years, wants a premium on the face value of Tk10 of its primary shares.

In Bangladesh, when a company wants a premium, institutional investors set a reference price of the shares through bidding and general investors will be able to purchase the primary shares at a 10% discount.  

As per the book building criteria, Asiatic Laboratories will arrange a roadshow on 24 October, where it will introduce itself to investors.

"Asiatic Laboratories has earned a good reputation by successfully conducting business for many years. So, we are seeking a premium from our investors," Company Secretary Ishtiaq Ahmed told The Business Standard.

"Our competitors are introducing new products regularly. So, we also need to increase the supply of new drugs to the market to retain the position."

He further said the company also plans to enter the veterinary and Unani medicine business in future.

At the end of 30 June 2021, its revenue stood at Tk140 crore. The paid-up capital of the company is Tk87 crore.

Shahjalal Equity Management Limited has already signed an agreement with the drugmaker to provide issue management services, where BMSL Investment Limited will act as registrar to the issue.

Businessman Minhaz Uddin Ahmed started the company in 1970. But after 26 years, he sold it to Monir Ahmed and Tahmina Begum.

At present, Tahmina Begum and Monir Ahmed are serving Asiatic Laboratories as chairman and managing director respectively.

Under the new owner, the drugmaker started its marketing operation in 2000 and it launched 80 generic molecules till 2020.

The company has started its global journey in 2005 by exporting medicine to Singapore and Vietnam.

The company secretary said in 1980, it was a popular drugmaker across the country.

"But the previous management could not hold its strong brand value. Now we are trying to get back the popularity," he added.

According to IQVIA, an American multinational company serving the pharma industry, the country's pharmaceutical market has surpassed Tk27,000 crore in 2020 with an annual growth of more than 10%.

Bangladeshi companies also export medicines worth around Tk1500 crore per year. However, the top 10 companies in the country sell about 71% of the country's total medicines.