Walton IPO Subscription Gets Huge Investors' Response

Small and general investors got back their confidence to do investment in the capital market, centering a recent IPO (Initial Public Offering) subscription, 

A good number of people opened BO (Beneficiary Owner) accounts along with many small and general investors activating their inactive BO accounts with the aim of applying only to an IPO subscription.

Investors' such scenario was found in the capital’s brokerage houses, including EBL Securities, Prime Bank Securities, Joytun Securities, Shahjalal Islami Bank Securities, Banco Securities and many others, during Walton Hi-Tech Industries’ IPO subscription from 09 to 16 August. 

During that time, investors crowded in the brokerage house amid the coronavirus pandemic only to apply in Walton IPO subscription.

Stakeholders think, some factors such as the leading electronics company in the local market, continuous business growth, very well the record of EPS (Earnings Per Share) as well as NAV (Net Asset Value) in last fiscal year lured the capital market’s investors into Walton's IPO subscription.

Authorities of some brokerage houses noted that a good number of BO accounts became inactive as the investors in past were reluctant to do investment due to the long absenteeism of the reputed companies' IPO as well as the continuous deterioration of the market. 

But now, a good number of those inactive BO accounts were further activated entering the start of Walton IPO subscription. In addition, a good number of new investors also applied in the Walton IPO subscription through opening BO accounts for the first time. 

Ataur Rahman, an investor of Joytun Securities, said, ''I was used to investing in both the IPO and the secondary market. Witnessing the market’s deterioration as well as no IPO issues of any reputed company for the local period, I lost my confidence in making any further investment in the capital market. But now, I am encouraged in further investment with the start of Walton like good company’s IPO subscription.'' 

Md. Sayedur Rahman, managing director of EBL Securities, said that the general investors responded extensively to the Walton IPO subscription as there were lured by the strong financial and business performance of the local leading electronics company. 

On June 23 this year, the Bangladesh Securities and Exchange Commission (BSEC) approved the IPO proposal of the Walton Hi-Tech to raise a fund worth Tk 1 billion in capital formation by issuing nearly 2.93 million ordinary shares.

As per the BSEC approval, the eligible investors will get 1.38 million shares of the company at the cut-off price of Tk 315 each, fixed earlier through the country's first-ever electronic bidding process.

According to the Dhaka Stock Exchange sources, a total of 233 eligible investors were applied in Walton IPO subscription. Among them, a total of 167 eligible investors applied for Walton's every share at the cut-off price Tk 315. And the rest 66 eligible investors applied at the above price of Tk 315 that were proposed by them for the company's each share during the bidding process.

Through a BO account, the general investor could apply only for a single lot at Tk 5,040, comprising 20 shares. And, the general investors applied in Walton IPO subscription at Tk 252 each share, a 20 percent discount on the cut-off price, as the company gave 10 percent additional discount considering the interest of the capital market and small investors.

The IPO proceeds will be utilized for the expansion of its businesses, repay bank loans and meeting the IPO related expenses. AAA Finance is in charge of issue manager of the company. 

As per the company’s financial statement as of June 30 of 2019, WHIL’s Net Assets Value (NAV) with revaluation reserve per share was recorded at Tk 243.16 and its Earnings Per Share (EPS) was Tk 45.87. 

It was known that Walton Hi-Tech is going to be listed in the capital market with ever highest EPS recorded during the IPO.