Regent Textile shares surge 37% in just four days
Despite the absence of any price-sensitive information, the sudden rise in Regent Textile’s share price has surprised market insiders
The share price of publicly listed Regent Textile Mills Ltd — one of the 11 debt-ridden companies under the Chattogram-based Habib Group — soared by 37% in just four working days, despite its factory remaining closed since September 2023, according to data from the Dhaka Stock Exchange (DSE).
Despite the absence of any price-sensitive information, the sudden rise in Regent Textile's share price has surprised market insiders. They believe that certain influential groups are artificially inflating the price by spreading rumours about a change in ownership.
Meanwhile, investors remain largely uninformed about the company's financial and operational status.
On 23 June this year, Regent Textile's share price hit its lowest point of the year at Tk2.90. Since then, the price started rising from Tk3 and has increased for four consecutive trading days, reaching Tk4.10 on Thursday — a 37% rise over the period.
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Regent Textile Mills incurred significant losses in 2020 and 2021, amounting to Tk4 crore and Tk20 crore, respectively. After that, the company did not disclose any price-sensitive information or any declaration to the shareholders.
On 26 September 2023, a team from the Dhaka Stock Exchange visited the factory premises of the company. During the visit, the inspection team found that the company's operations were completely shut down.
Since 2021, the company has not paid any dividends to its shareholders.
Regent Textile Mills Ltd, which was established in 2006, is a 100% export-oriented textile mill for high-quality woven fabrics and home furnishing items located at Kalurghat, Chattogram.
The Bangladesh Securities and Exchange Commission (BSEC) approved its IPO in August 2015 to raise Tk125 crore from the capital market.
Regent Textile Mills sold each of its shares at Tk25 during the IPO, including a Tk15 premium. Despite the high premium, the company has failed to deliver expected returns to investors since its listing on the stock exchanges. Since being listed, it has paid only a 21% cash dividend to shareholders.
Additionally, the company has a significant loan burden, further affecting shareholder value.
According to DSE data, as of June 2021, the company had outstanding loans totalling Tk124 crore.
The company used its Initial Public Offering (IPO) funds to acquire its own affiliated entity, Legacy Fashion Limited, as a new RMG project. It spent Tk83.01 crore of investors' money on this acquisition after receiving five deadline extensions from the securities regulator for the utilisation of its IPO funds.
The company did not update its shareholding position from 31 May 2023.
As of 31 May 2023, the sponsors and directors jointly held 54.55% of the shares, institutions 4.61%, and the general public held 40.84%.
