Krishibid Feed plans to go public for Tk 30cr

Krishibid Feed, a sister concern of Krishibid Group, has deisgns to go public to raise Tk 30 crore to expand its business to meet the growing demand for feeds in the livestock sector.

The poultry, fish and cattle feed producer has already applied to the stock market regulator for its initial public offering.

One-third of the IPO proceeds will be used to repay bank loans. About Tk 18 crore would be used for business expansion purposes and the rest to foot IPO expenses.

It will set up two factories in Bogra and Panchagarh as it makes a push towards grabbing the feed market of the country’s northern region and also expand its existing factories in Bhaluka of Mymensingh.

The building and other civil construction works would cost Tk 7 crore and the new machinery Tk 4.08 crore.

The company will also shell out Tk 4.06 crore to buy 13 delivery vans to strengthen its supply chain and Tk 2.85 crore to buy two diesel generators.

With the new plants and delivery vans, Krishibid Feed’s transport cost will drop, said Sifat Ahmed Chaudhuri, its finance director.

“It will help us compete aggressively in the market,” he said, adding that the company is also on the lookout for foreign funds to set up more plants as animal feed has huge demand.

According to the IPO prospectus, the industry’s current turnover is more than Tk 10,000 crore and a growth rate of about 10 per cent a year.

Since the 2015-16 financial year, the company has witnessed handsome growth in its turnover every year. But Krishibid Feed’s profits did not increase at the same rate.

The company’s turnover rose 133 per cent to Tk 89.92 crore in its 2018-19 financial year compared with the 2015-16 financial year, but its net profit rose 45 per cent to Tk 5.10 crore during the time, according to the prospectus.

“We had to keep our prices low to compete in the market as we barely sold our products on credit like our competitors. This has impacted our profit,” said Chaudhuri, also a director of the Bangladesh-Malaysia Chamber of Commerce and Industries.

But once the expansion is complete the eight-year-old company will see brighter days, he said, adding that their sales remained almost unscathed during the ongoing pandemic as their products have a constant demand.

Though their main markets are Mymensingh, Satkhira and Comilla, now they are trying to expand the network all over the country, Chaudhuri said.

“Krishibid Feed has huge potential as its directors are highly educated with professional backgrounds in agriculture,” said Khairul Bashar Abu Taher Mohammed, chief executive officer of MTB Capital, the issue manager of the company.