FMCG major Marico has raised the issue size of (one of its kind )IPO in Bangladesh for its local subsidiary Marico Bangladesh Ltd (MBL). The issue was originally to dilute 5% stake in the Bangladesh unit to raise around Rs 9 crore to strengthen operations of MBL.
Now it is looking to dilute as much as 10% in the arm through the greenshoe option. Out of this additional shares in the greenshoe option, about 10% will be for employee of the firm. Incidentally, this is the first time a company has opted for the greenshoe option in Bangladesh financial market, reflecting the investors appetite for an Indian managed firm not just in the West but also in a developing market.
As a result of this additional shares at issue the IPO timeline has been extended by two days and will now close on August 10th. The shares are priced at Taka 90 (approximately Rs 62) and the IPO would now raise close to Rs 18 crore. The shares are to be listed on Dhaka Stock Exchange besides Chittagong Stock Exchange.
MBL operates in the consumer goods space with brands such as Parachute, Aromatic and Camelia with one in every Bangladeshi being a Marico customer. Parachute, the flagship brand enjoys market share of as much as 74% in Bangladesh. Aromatic and Camelia are products in personal wash category.
MBL had revenues of $45 million (around 9% of Marico’s consolidated sales) for the year ended March’09 with net profit of $5 million. At the issue price, the subsidiary would be valued at around Rs 200 crore or about eight times its earnings of last year.
As against this the Indian parent company Marico Ltd enjoys a market cap of Rs 5,000 crore or 27 times its consolidated earnings last year.