BPPL gets nod for Tk 225 crore IPO

The Baraka Patenga Power Limited (BPPL) will invest part of its initial public offering (IPO) proceeds of Taka 144.34 crore in two of its power generating subsidiaries to emerge as one of the largest players in the country’s private sector power generation.The principal activity of the company is to set up power plants for generation and supply of electricity. The 50MW capacity plant located at Patenga in Chattogram, started its commercial operation on May 4, 2014, said a press release.

Subsidiaries of the BPPL, the Karnaphuli Power Limited (KPL) and the Baraka Shikalbaha Power Limited (BSPL), have already started commercial operation after implementing two Heavy Fuel Oil (HFO) based IPP (Independent Power Producer) power plants having generation capacity of 110MW and 105MW respectively, reports BSS.

“Our mission is to become the largest power generating company in the private sector by developing more power plants across the country,” said Gulam Rabbani Chowdhury, Chairman of Baraka Patenga Power Limited (BPPL).The private sector now dominates Bangladesh’s power generation to a great extent.Earlier, on December 31, 2020, Baraka Patenga Power’s bid to raise Tk225 crore from the public received the green light from the Bangladesh Securities and Exchange Commission (BSEC).

The company will utilize portion of its IPO proceeds of Tk144.34 crore to invest in two of its subsidiary power plants, Karnaphuli Power and Shikalbaha Power. The rest of the funds will be used to repay loans and bear the expenses of the IPO process.The bidding to discover the cut-off price of shares of the company’s Tk225 crore-initial public offering (IPO) will begin on February 15 for 72 hours. The exercise is part of the book-building method that the power generation company chose to raise funds from the public.

The company published notice in renowned newspapers to invite investors, normally large-scale buyers and fund managers to submit bids on the number of shares that they are interested in buying and the prices that they would be willing to pay.The book is ‘built’ by listing and evaluating the aggregated demand for the issue from the submitted bids. After the bidding, the cut-off price will be decided. Retail investors will get the shares at a 10 per cent discounted price.

The lion’s share of the IPO fund would be used in equity investment in Karnaphuli Power and Baraka Shikalbaha Power to settle the deferred obligations for Gen-sets procurements, BPPL chairman said. Baraka Power Limited, parent company Baraka Patenga Power Limited, is already listed on the bourses since 2011. Baraka Patenga Power holds 51 percent shares of both the two companies, whose main role is to generate and supply electricity to the national grid.

In its 2019-20 financial years that ended on June 30, the company logged in Tk 67.4 crore as profit, up a staggering 123.9 percent. For the first time in the power sector in Bangladesh, a desulphurization plant was introduced to the project to reduce Sulphur emission to an acceptable level, said Monzur Kadir Shafi, managing director of Baraka Patenga Power Limited.The stock market regulator also directed the company to hold 51 percent shares of its subsidiary companies at all times and they are maintaining it. Such a condition of the regulatory body would be good for the general investors, market insiders said.

(AA)