Sikder Insurance proposes to invest Tk6.08cr in govt treasury bonds
47% of IPO funds remained unutilised as of September
After failing to meet the deadline for fully utilising its initial public offering (IPO) funds, Sikder Insurance Company has revised its fund utilisation plan, opting to invest Tk6.08 crore in government treasury bonds instead of purchasing floor space.
The decision was taken during a board meeting held on Tuesday, according to a disclosure on the Dhaka Stock Exchange website.
The non-life insurance firm had raised Tk16 crore from the capital market earlier this year through the issuance of ordinary shares. The funds were intended for fixed deposit receipts (FDR), capital market investments, floor space purchases, and IPO-related expenses.
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With the completion of the capital raising process, Sikder Insurance received the IPO funds on 14 January and was required to fully utilise them by 14 April.
However, as per the company's utilisation reports up to September, 47% of the IPO funds, amounting to Tk7.95 crore, remained unutilised. Of this, Tk6.08 crore, initially allocated for the purchase of floor space as outlined in the prospectus, was left entirely untouched.
Now, the company's plan to invest a major portion of the remaining fund in treasury bonds awaits approval from the Bangladesh Securities and Exchange Commission (BSEC).
According to its auditor report on IPO proceeds utilisation, Sikder Insurance invested Tk4.20 crore in FDRs as of September, surpassing the Tk4 crore originally budgeted in the prospectus. Meanwhile, it used Tk3.30 crore out of the Tk4.80 crore allotted for capital market investments, representing 68.81% utilisation.
Additionally, the company had budgeted Tk1.11 crore for IPO-related expenses, of which Tk90 lakh has been utilised, leaving Tk21.28 lakh, or 19.13% of the allocated funds, unutilised.
Yesterday, its shares price closed at Tk23 each on the Dhaka Stock Exchange (DSE), a 2.54% drop from the previous session.
As of November, out of its total shares, sponsor-directors held 60%, institutional investors 2.23%, and the general shareholders held 37.77%.
