.Acme Pesticides Limited has recently applied to the Bangladesh Securities and Exchange Commission (BSEC), to raise Tk30 crore from the stock market through an initial public offering (IPO) using the fixed price method.
The company wants to raise the funds by issuing three crore ordinary shares at a face value of Tk10 each.
Acme Pesticides wants to allocate: Tk10.15 crore of its IPO proceedings for factory building and other construction, Tk2 crore for electrical installation, Tk10.5 crore for new plant and machinery acquisition, Tk2.35 crore for IPO expenses, and Tk5 crore for bank loan repayment.
According to the company's audited report for the year ended on 30 June, 2020, its net profit was Tk19.47 crore, which was 22% higher than the previous year.
During the period, its net revenue was Tk153.86 crore, a 17.21% increase from that of the previous year.
As of 30 September this year, the company's earnings per share was Tk2 and the net asset value per share was Tk16.36.
The company's authorised capital is Tk150 crore, while its paid-up capital is Tk105 crore. After the IPO, the company's post paid-up capital will be Tk135 crore.
Acme Pesticides started business on 7 March, 2010. The company is a concern of the Sinha family. Acme Laboratories Ltd, listed with the stock market in 2016, is also a concern of the family.
The pesticide company primarily manufactures and sells: insecticides, pesticide, household products, and toiletries.
It sells two types of products – consumer and agro-based – in the fertiliser and seeds sector.
According to the company sources, Acme Pesticides mainly focuses on producing agro-based products since its demand is increasing gradually among farmers across the country.
Major competitors of the company are: AFC Agro Biotech, ACI Formulations, Agriculture Marketing Company, Aftab Fertilizers and Chemicals, Nature & Care Agro Products, ACI Godrej Agrovet Private, and Supreme Seed Company Ltd.
In the agriculture sector, the quality of seeds accounts for 20-25% of productivity. The overall demand for quality seeds has also increased.
According to business insiders, open-pollinated seeds have a 34% market share while hybrid seeds have 66%. Among the hybrid seeds, 90% of maize seeds are imported from India.
The market is growing by more than 10% a year, with the increasing market share of private firms in the agriculture sector.
According to the Bangladesh Agricultural Development Corporation (BADC), the target of seed procurement was 1.40 lakh metric ton in FY2019-20. But it was only possible to procure 1.12 lakh metric ton during the period.
More than 100 firms – including some non-governmental organisations – sell seeds, mostly hybrid ones, through 18,000 registered dealers.
Meanwhile, the use of chemical fertilisers is increasing with the increased demand for food production in the country. The highest contribution in the country's agriculture sector is the use of fertilisers.
In FY2017-18, the total quantity of fertiliser used was 50.93lakh metric ton. In FY2018-19, the amount increased to around 55.75 lakh metric ton.