GP shares to hit bourse after Eid

Subscription to the Grameenphone's initial public offering (IPO), the largest of its kind in the country's capital market, will start within a week after Eid holidays.

Securities and Exchange Commission (SEC) at a meeting yesterday gave consent to the Tk 486.08 crore IPO and set the time frame.

Stock market regulator SEC made the decision based on GP's latest audited financial report as of December 31, 2008, which the GP submitted on July 30 this year.

On July 2, the commission gave its primary approval to GP IPO and asked the company to provide it with the latest audited financial statement within July 31 this year for final approval.

As per the report, per share earnings of the leading mobile phone operator is Tk 4.47, while its net asset value is Tk 22.70 per share.

The market lot has been fixed at 200 shares. Market lot means the minimum number of shares of a company that can be bought or sold on a stock exchange.

A prospective investor has to bid for at least 200 shares in case of GP's IPO.

Each share will have Tk 10 in face value, with an additional Tk 60 as premium.

As many as 6.94 crore shares will be floated through GP's IPO to draw Tk 486.08 crore from the capital market.

After the meeting, SEC Executive Director Anwarul Kabir Bhuiyan told journalists that "The Grameenphone's IPO will widen market depth."

He also said it might have a temporary impact on the liquidity flow during the subscription period, but will not have "any major impact on the market."

The value of the approved IPO is Tk 37 crore more than the company's proposed offer of Tk 449 crore.

On July 2, the SEC also approved the increase in the volume of the company's pre-IPO to Tk 486.07 crore from Tk 420 crore with face value of each share priced at Tk 10, plus Tk 64 in premium.

In December last year, Grameenphone's Tk 420 crore pre-IPO was settled with a huge response on the local market.

Grameenphone will be the first telecom company to enjoy a corporate tax cut of 10 percentage points.

The government in the new budget announced that mobile phone operators might be given the chance to pay 35 percent corporate tax instead of the existing 45 percent if they get listed on the stock exchange.

But they must float 10 percent of the paid-up capital on the share market, of which pre-IPO cannot be more than half.

The price of each share has been increased to Tk 10 from the company's proposed Tk 1 following demands from market stakeholders.

Cititgroup Global Markets Bangladesh Private Ltd is the issue manager of the IPO.

Norway's telecom giant Telenor owns 62 percent of Grameenphone, launched in 1997, while local Grameen Telecom owns the rest. The share offloading will be split between the two shareholders proportionately.