BSRM Steels raises Tk 245cr through zero-coupon bonds - Share market analysis of dhaka stock exchange, Bangladesh

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13 June, 2016 10:39 AM Source: The Daily Star Bangladesh

BSRM Steels, a unit of Chittagong-based BSRM Group, raised Tk 245 crore through what has been the largest issue of zero-coupon bonds by a company in Bangladesh yet.

A zero-coupon bond, also known as discount bond or deep discount bond, is bought at a price lower than its face value, with the face value repaid at the time of maturity.

The proceeds of the bonds will be utilised for BSRM Steels' capital expenditures, refinance and equity investment in its subsidiary company.

Ten institutions invested in BSRM Steels' zero-coupon bonds, arranged by Standard Chartered Bank.

Of the institutions, 66 percent were corporate, 21 percent banks and non-bank financial institutions, 7 percent insurance companies and 5 percent asset management companies.

The subscription closing ceremony took place at the Westin Hotel on June 2 and was attended by BSRM Group Managing Director Aameir Alihussain, who is also the managing director of BSRM Steels.

BSRM Group is a leading steelmaker, with a market share of about 20 percent. The company started its journey in 1952 and since then it has been pioneering the steel industry in the country.

Standard Chartered is delighted to be the mandated lead arranger for this landmark transaction, said Abrar A Anwar, chief executive officer of the British bank's Bangladesh operations.

BSRM Steel was listed on the stockmarket in 2009. Its net profit was Tk 209.68 crore in 2015, up from Tk 123.92 crore a year ago.

On the Dhaka Stock Exchange yesterday, each BSRM Steel share traded between Tk 93 and Tk 94.5, before closing at Tk 93.2.

Sponsors hold 70.87 percent stake in the company, while institutions 17.94 percent, foreign investors 0.36 percent and general public the remaining 10.83 percent, according to DSE data. 

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