Book-Building Price Discovery
United Power shares sold at Tk 72 to institutional investors
Institutional investors on Tuesday bought United Power Generation and Distribution Company’s 1.32 crore shares, the entire allocation for them under the book-building method, at a price of Tk 72 each. Through the institutional investors bidding the United Power raised Tk 95.04 crore. Company sources said that 83 firms participated in the bidding where 45 firms called the highest amount of Tk 72 as the book-building method allowed 20 per cent deviation from the indicative price.
In April 2013, the company set indicative price of Tk 60 including Tk 50 premium for IPO under the book-building method under which the final price was set by bidding by institutional investors.
According to the book-building method, United Power now can offer Tk 72 or lower per share to the public but not above the price set by the institutional investors.
The Bangladesh Securities and Exchange Commission after the 2010-11 debacle of share market, as per a government directive, suspended the controversial book-building system in January 2011 till October 2011 as the method was used for price manipulation.
Dhaka Stock Exchange officials said that if the price of United share was set Tk 72 for IPO, the general investors would be in danger of losses as the share price of other listed power companies is between Tk 21 and Tk 58.
-With New Age input
