The Bangladesh Securities and Exchange Commission (BSEC) has allowed Star Adhesives Ltd, a concern of Partex Star Group, to raise Tk5 crore through a qualified investor offer (QIO) from the SME board of the Dhaka Stock Exchange (DSE).
The company will issue 50 lakh ordinary shares at a face value of Tk10 each.
Out of the amount, Star Adhesives wants to spend Tk1.51 crore for factory renovation, Tk1.80 crore for working capital, and Tk1.60 crore for repaying bank loans.
According to the company's audited financial statement as of 30 June 2021, its net profit stood at Tk2.69 crore, which was Tk0.88 crore in the previous year.
Its revenue was Tk41.24 crore, which was Tk25.33 crore a year ago.
At the same time, its basic earnings per share were Tk6.05 and net asset value per share Tk12.56.
The company will not be able to issue bonus shares in the next three years of its debut in the DSE SME platform.
AAA Finance and Investment Ltd is the issue manager for the company.
Star Adhesives was incorporated in Bangladesh on 1 January 2013.
The firm manufactures different types of adhesives, lubricants, lacquer, spray paint, and silicon and also produces brake oil and grease.
As per the company prospectus, adhesives are used as a backward linkage material for board, door, leather, footwear, plastic, household, and paint industries in the country.
It is one of the most prospective industries and has enough scope in Bangladesh, the prospectus added.
The average growth of the adhesive industry in Bangladesh is 30%.
The most common manufacturing items in adhesives are rubber adhesives, resin, PUR, distemper, solvent cement, hot melt glue, super glue, silicone, wood preservative, NC thinner, and spray paint.
Star Adhesives, Pidilite Industries, RFL, Berger Paints, Fast Group, and Bengal Group are the major players in this sector.
According to the Bangladesh Adhesive Manufacturers' Association (BAMA), there are around 150 firms engaged in the adhesives business in the country.