City Touch app creator Brain Station 23 to go public

TBS Illustration

Brain Station 23 PLC, a software company that developed the mobile digital banking platform — City Touch, has submitted an application to the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk5 crore via a qualified investor offer (QIO) within the SME platform of the stock exchanges.

The company developed the first in-country mobile app City Touch, a digital banking platform of the City Bank in 2017.

Brain Station will raise the funds by issuing 50 lakh shares at a face value of Tk10 each to expand its business, according to the company prospectus seen by The Business Standard.

Lankabangla Investments Ltd is working as the issue manager of the company.

The company plans to spend Tk4.70 crore to procure computers and IT equipment to facilitate business expansion. This includes investments in laptops, desktops, MacBook Pros, network items such as switches, application servers, and storage servers, as well as transmission control protocol and WIFI solutions. The procurement process will start after receiving the QIO fund and will be completed within 24 months.

Raisul Kabir, managing director of the company, told TBS, "Brain Station is aspiring to join the capital market to increase its business scope in the information technology sector at home and abroad, as well as to create opportunities for sharing the company's capital shares among employees."

The development of the company in the ever-changing information technology sector through proper utilisation of capital from the market can contribute significantly to the country's economy from local and international businesses, he added.

Brain Station 23 is one of the largest IT solutions and software exporters in Bangladesh.  The company with 17 years of experience since its inception in 2006, serves over 300 global and domestic clients across diverse industries and currently employs 700 full-time software engineers and other professionals.

The principal activities of Brain Station 23 PLC are to provide IT Enabled Services. It is involved in software development, Software or application customisation, web hosting and related services, IT support, and software maintenance services.

In the first quarter of the current fiscal year, a big portion of revenue of the company came from software development and customisation services. During the year, its revenue of Tk29 crore came from these services. The rest of the portion came from web hosting and related services.

The major competitors of the company are - Leadsoft Bangladesh, eGeneration, and Red. Dot Digital, Astha IT, Tiger IT, and Kazi IT Limited.  

Financials

According to the company prospectus, the company currently relies on local revenue for one-third of its income, but it aims to reduce this to 24% over the next five years, aligning with its global expansion strategy.

The company is actively pursuing new foreign clients in Finland, Spain, New Zealand, Austria, Saudi Arabia, and Malaysia. This strategic move is expected to boost revenue in the Asian and Oceania regions, aligning with the company's broader global expansion objectives.

From July to September of this fiscal, the company achieved a revenue of Tk33.13 crore, which was Tk27.71 crore in the same period of the previous year. During this quarter, its profit after tax stood at Tk8.21 crore down from Tk8.39 crore one year ago.

Its earnings per share stood at Tk1.92 and its net asset value per share was Tk19.28 as of September 2023.

Its authorised capital is Tk100 crore and paid-up Tk42.76 crore, according to the draft prospectus of the company. 

Demand for software and IT-enabled services is growing in the country as many local business entities alongside the government and other organisations are adopting automation. After overcoming the pandemic consequences, the sector has now been able to attract customers worldwide through IT-enabled services, said industry people.