Bangla Trac files to raise Tk8.5cr for SME board listing

Infographic: TBS

Bangla Trac Rental Services PLC, a provider of heavy-weight rental equipment solutions, has applied to the Bangladesh Securities and Exchange Commission (BSEC) for listing in the SME platform of the stock market through a qualified investor offer (QIO). 

The company wants to raise Tk8.5 crore through the QIO for business expansion. Of the fund, Tk8.16 crore will be used for machinery acquisition, and the remaining for QIO expenses. 

Bangla Trac was incorporated in 2012, but started operations in 2019. 

The company provides rental solutions of a wide variety of equipment to its customers at different price points. It offers both short-term and long-term rentals of heavy-weight machinery to a wide range of industries including oil and gas, construction and infrastructure, events, industrial and manufacturing, and marine and ports. 

The company rents out well-maintained diesel generators, gas generators, and construction and industrial equipment such as excavators, wheel loaders, bulldozers, forklifts, hydraulic drilling rig, crawler cranes, rough terrain cranes, low bed trailers, and more. 

Abdullah Al Kafy, chief financial officer of the company, told TBS that the economic development till date increased the demand for rental at both its business segments—short-term captive power generation and construction equipment.

His company is increasing investments eying a long-term growth in the businesses as the industry is expected to grow a lot.

The company would invest the amount raised from the investors to enhance its capacity to serve more clients, he added. 

Financial performance

In the 2022-23 fiscal year, the company's revenue stood at Tk31.63 crore, slightly lower than what it was in the previous fiscal. 
A 62.91% of the company's revenue comes from rental of engines, 20.22% from machinery, 13.32% from used equipment, and 3.55% from others. 

The economic development till date increased the demand for rental at both its business segments—short-term captive power generation and construction equipment. The company would invest the amount raised from the investors to enhance its capacity to serve more clients. [Abdullah Al Kafy, CFO, Bangla Trac Rental Services]

Its after-tax net profit stood at Tk4.30 crore, which was Tk2.34 crore a year ago. The basic earnings per share stood at Tk2.15, net asset value per share at Tk17.41, total liabilities at Tk68.30 crore, and assets at Tk97.16 crore at the end of FY23. 

In its prospectus, Bangla Trac stated that its revenue declined year-on-year because of factors like global and political turmoil, sharp devaluation of the taka against the dollar, and rising interest rates. 

Its business usually experiences a seasonal impact. During the summer, utilisation of the rental fleet increases resulting in a growth in revenue while during the rainy season, utilisation of machines decreases resulting in a momentary decline in revenue, according to the company prospectus.

Industry insights

The heavy-weight machinery industry in Bangladesh has experienced remarkable expansion in the past decade.

When the government started mega projects like the Rooppur nuclear power plant, Padma bridge, Karnaphuli Tunnel, Matarbari power plants, Dhaka Metro Rail, and HSIA Terminal 3, demand for such infrastructure equipment rose significantly. 

Bangla Trac, Energypac, Runner, ACI, Nitol Niloy, and HNS Group have strategically partnered with globally renowned heavy-weight machinery manufacturers to offer competitive pricing on both new and older machines to local companies. 

The heavy-weight machinery industry has witnessed significant growth, with its value increasing from Tk1 billion in 2001 to Tk20 billion last year. 

This growth indicates the abundance of opportunities available for all stakeholders involved. 

Among the market players, Bangla Trac Rental has emerged as the leader, thanks to its affiliation with Bangla Trac Limited, the sole authorised dealer of Caterpillar Inc USA in the country.