Dungsam Polymers Limited (DPL), the first company ever in Bhutan that floated its shares at a premium price of Nu 165 per share formally listed with the RSEB (Royal Securities Exchange of Bhutan) yesterday at the DHI (Druk Holding and Investment) office, Thimphu.
Within few minutes after listing, the share value reached Nu 175 per share signifying further increase in the share value in future.
The Initial Public Offering (IPO) of each share was provided by the company at Nu 165 which is 65% over its face value. To raise Nu 66.5mn, there were 403,031 shares offered to the public. The offer will give 49 percent to the public while the promoters will hold 51 percent. “The response to the IPO was awe-inspiring with more than three times of the subscription and had to extend 10 days on the request of the broker”, Chairman of DHI, Lyonpo Om Pradhan said.
“DHI, in consultation with the Royal Government, decided instead to first setup DPL by ourselves and then invite participation after its completion. This was done to provide an alternative investment avenue to the general public of Bhutan,” Lyonpo added.
The main market for the company will be the Dungsam Cement Corporation Ltd and smaller demands from India have also been explored.
The Director of DPL and Senior Analyst of DHI, Om Nirola said the DPL board would strive hard to provide proactive strategic direction to the company.
He said the board is aware that DPL faces key challenges for the company to be in a position to operate at its maximum capacity and pay good dividends to the shareholders as soon as possible.
“With the imminent commissioning of DCCL, the largest customer of DPL product, and the efforts by management to explore other markets, I believe that it should not be long before DPL starts adding value to our shareholders stock,” he added.
The owners of the land acquired for DPL were compensated as per the norms of the Government and provided a fixed quantity of shares at the same premium pricing based on acreage.
The Nu 66mn raised through the IPO will be used for the company’s growth for the development of NikkaChhu hydropower project.
The event was presided over by the Chairman and CEO of DHI, CEOs and officials of the RSEB and BoB Securities Ltd, officials from DHI and local reporters.
DPL was established on August 12, 2010 as a subsidiary company of DHI. The company is a polypropylene bag manufacturing unit with a capacity of producing one hundred thousand bags per day. The company paid up capital stands at Nu 168.7mn of which Nu 126mn borrowed from the National Pension and Provident fund (NPPF) and Nu 42.1mn invested by DHI.