Rahima Food leads turnover chart as City Group steps in to revive operations

Rahima Food Corporation Limited topped the turnover chart at the Dhaka Stock Exchange (DSE) today (21 December) as investors reacted positively to City Group's move to bring the long-idle company back into operation.

The company's shares traded worth Tk12.64 crore during the session, making it the most traded stock of the day. Its share price jumped 7.95% to close at Tk149.30, reflecting renewed investor optimism following the latest corporate disclosure.

According to a price-sensitive statement filed with the DSE, City Group has extended a lifeline to its struggling listed subsidiary by initiating operational activity through a contract manufacturing arrangement with City Edible Oil, a sister concern of the group.

Rahima Food said its board approved a five-year contract manufacturing agreement at a meeting held on 18 December. Under the agreement, Rahima Food will use its existing bottling capacity to manufacture bottles for City Edible Oil products. The contract may be extended after the initial term, subject to mutual consent.

Market participants see the move as a strategic effort by City Group to utilise Rahima Food's idle assets and gradually revive operations without requiring immediate fresh investment.

The company's factory in Narayanganj has remained shut for months following the suspension of its cashew nut processing plant in August and the closure of its coconut oil plant in July, leaving Rahima Food completely non-operational.

City Edible Oil, incorporated in 2019, is part of City Group's fast-moving consumer goods portfolio. By outsourcing bottle manufacturing to Rahima Food, the group is strengthening internal supply chain linkages while helping a listed group company re-enter revenue-generating activities.

Rahima Food has faced persistent financial stress in recent years. In the July–September quarter, its revenue plunged 77% year-on-year to Tk0.67 crore, while it posted a loss of Tk0.10 crore due to the absence of operations.

For the full FY25, the company reported a 40% decline in revenue to Tk9.26 crore, while net profit fell 48% to Tk1.11 crore. Despite the downturn, the board recommended a 2% cash dividend, a move analysts believe was aimed at maintaining shareholder confidence amid challenging times.