Standard Ceramic to borrow Tk15cr for working capital

Publicly listed ceramic tableware manufacturer - Standard Ceramic Industries Ltd - is going to take a bank loan of Tk15 crore to solve its working capital crisis. 

And, the announcement suddenly increased the demand for the struggling company's shares on the Dhaka Stock Exchange (DSE) on Sunday.

Following the early hour jump, the stock barely had sellers at the top circuit breaker of Tk160.4 over the session and it closed at the same, which was 9.9% higher than its previous session's closing price.

Analysts were surprised to see the market response to the company's decision of solving the ongoing working capital crisis through increased loan burdens.

The company mentioned in its disclosure that it had to partially lay off its factory for three months because of rebuilding its Glost Kiln. Then, the industry was closed for around three months due to the Covid-19 pandemic.

Also, the Russia-Ukraine war pushed the costs of raw materials, shipping, and transportation to an unprecedented level, while the recent flood in Bangladesh affected the market.

Thus, the company had to turn to bank loans to meet its working capital shortage.

Standard Ceramic began commercial production of ceramic tableware in 1993 and due to its small capital, the company's shares often tend to move sharply on the bourses.

Its factory at Gazipur is capable of manufacturing 47,000 assorted pieces or 13.1 tonnes of tableware per day. It sells both in the local and foreign markets, according to the firm's website.

Listed in 1996, the company's paid-up capital has grown to Tk6.46 crore. Sponsors-directors hold 30.5% of the company shares, institutional investors 3.97%, and the general public 65.53%.

At the end of the 2021 fiscal year, Standard Ceramic's net asset value per share stood at Tk9.72.