Letter of Transmittal

19th Feb 2023

Dr. Shaikh Masrick Hasan

Associate Professor

Department of Finance

Jagannath University.

Subject : Submission of the internship report on IPO process and analysis of LankaBangla
Investments.

Dear Sir,

It gives me immense pleasure to be able to successfully submit my internship report to

you on IPO process of LankaBangla Investments as per requirement of my MBA
program. I have tried my heart and soul to make this report informative and free from
error. Also, it was a great experience for me to work under your guidance. I express my
special gratitude to you for dedicating your valuable time and helping me whenever
needed.

I, therefore, pray and hope that, you would be kind enough to accept my internship report on
the given topic. I would be available in case of any further clarification or elaboration
regarding the topic.

Sincerely yours,

Md. Ashikur Rahman (ID : M22020203550)

Md. Tawfiqul Islam (ID : M22020203561)

Fahmidur Rahman Khan Jony (ID : M22020203575)

Saad Al Mansur (ID : M22020203577)

Md. M. R. Sakib (ID : M22020203580

 Table of Contents

No. Topics Page

Chapter 1 – Organization Overview

1.1 Company Information 2
1.2 Company Background 2
1.3 Vision 3
1.4 Objectives 3
1.5 Key Strengths 3-4
1.6 LankaBangla Investments Limited Organogram 5
1.7 Milestones 6
1.8 Products and Services 7
1.8.1 Portfolio Management Services 7-9
1.8.2 Primary Market Services 9-10
1.8.3 Investment Banking Services 10
Chapter 2 – Project Overview
2.1 Introduction 12
2.2 Problem Statement 12
2.3 Objective of the Report 12
2.4 Limitation of the Report 13
2.5 Methodology 13
2.5.1 Sample 13
2.5.2 Time Period 14
2.5.3 Computation 14
2.5.4 Source of Data 14
2.6 Evidence from Major Stock Exchanges 15
2.7 Evidence from Asian Stock Exchanges 16
2.8 Bangladesh Capital Market Brief Overview 17-18
2.9 Level of Underpricing/Overpricing 19-20
 No. Topics Page

2.10 IPO Underpricing on Yearly Basis 20-21

2.11 IPO Underpricing on Sector Basis 21-22
2.12 Reasons of Underpricing 23-25
Chapter 3 – Conclusion &
Recommendations
3.1 Conclusion 27
3.2 Recommendation 28
3.3 Learning Outcomes 29
Reference 30
Appendix: Return and Underpricing/Overpricing Calculations 31-35
Investment Banking in Bangladesh

Investment Banking is an American synonym of merchant banking. It is a financial

institution that assists individuals, corporations and governments in raising capital by
underwriting and/or acting as the client's agent in the issuance of securities. In the
Bangladesh context, financial institutions that carry out some distinct activities are being
addressed as merchant banks. The core functions of merchant banks in Bangladesh include
issue management, underwriting and Portfolio management services. The SECURITIES
AND EXCHANGE COMMISSION, based on SRO No 59 of 24 April 1996, and a decision
taken by it on 17 August 1997, invited letters of intent from 14 institutions for registration of
merchant banks. Prior to this decision, 7 institutions submitted such letters of intent and SEC
gave registration to a total of 19. Presently, a total of 50 merchant banks are operating in the
country, and their aggregate paid-up capital amounts to about Tk 36 billion. Among them 43
are full-fledged merchant banks. Merchant banks in Bangladesh are actively governed by the
Securities and Exchange Commission (SEC) and submissively by the Bangladesh Bank.

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 CHAPTER 1

ORGANIZATION OVERVIEW

Page | 2
1.1 Company Information
LankaBangla Investments Limited (LBIL) a fully owned subsidiary of LankaBangla
Finance Limited, one of the leading Non-Banking Financial Institutions in Bangladesh.
LBIL is engaged in providing investment banking services and Investment Management
Services for its clients.

LBIL has positioned itself prominently in investment banking through its wide range of
investment banking product services and broad client base.

With substantial expertise and long track record of operational experience in the capital
market of Bangladesh, LBIL made itself a major force in investment banking business of
Bangladesh.
LBIL has competent human resources with a combination of experience, diversified
knowledge, and knowledge on regulations. It human resources are well capable of
providing optimum financial solutions for their clients. LBIL values on long term
sustainable business operation and relationship with clients. It provides tailored financial
solution for client with in-depth analysis.
As a stakeholder of the capital market of Bangladesh, LBIL values the importance of
development of capital market of Bangladesh. LBIL always try to create value addition in
the market by introducing new products, maintaining global standard in services we offer,
standardizing the operational procedures for providing international standard service.

1.2 Company Background

LankaBangla Investments Limited (LBIL) was incorporated in Bangladesh with the
Registrar of Joint Stock Companies and Firms (RJSCF) on 29 March 2010 as a Private
Limited Company under the Companies Act, 1994. This Company is a fully owned
subsidiary of LankaBangla Finance Limited. LBIL inherited its merchant banking
operation from its parent company, LankaBangla Finance Limited, which was the first
merchant bank to offer discretionary portfolio management services back in 1997. The
Company has obtained Merchant Banking license from the Securities and Exchange
Commission on 2 January 2011. In 2010, to respond to the regulatory desire to spin off its
merchant banking operation under a separate company to bring more transparency and
regulatory control, LankaBangla Investments was formed as a fully owned subsidiary and
it obtained full- fledged merchant banking license form SEC on 02, January, 2011 and
officially started its operation on 16th January, 2011 taking ownership of the entire
merchant banking of LankaBangla Finance Limited.

During the period of 1999-2005, its operation became stagnant due to the market
condition. At the end of 2006, its merchant banking operation started again with a
nondiscretionary portfolio product along with issue management and underwriting
services. By the end of 2010, it became one of the top merchant banks.

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1.3 Vision
To develop into a finest investment bank in Bangladesh by achieving the highest
benchmark in service quality, corporate governance, human capital, knowledge, market
insight and use of technology.

1.4 Objectives
To support the aspirations of customers, employees and stakeholders with objectivity,
knowledge, insight and experience by:
Delivering exclusive and flexible equity and investment solutions to customers to
meet the unique needs of each individual or corporate body.
Building capacity through recruitment and development of highly qualified
personnel and through effective utilization of state-of-the-art technology.
Ensuring excellence in corporate governance and strong ethical conduct.

Create long-term value for clientele and stakeholders and the community as a
whole.

1.5 Key Strengths

LankaBangla Investments Limited takes pride in the quality of its people and the collective
track record they represent. From the time of its inception LBIL has made the best effort
to attract and retain the best minds in the business and investments, with broad-ranging
expertise in primary market operation, equity analysis, portfolio management, private
equity, leveraged finance, restructuring, M&A, corporate advisory and many other
disciplines.

Support
LBIL is able to harness investment banking opportunities for our clients and add
value to their pursuit of competitive advantage, productivity and profitability at a
domestic and regional level. We will stay focused and relentlessly pursue our
promise of excellence. Staying on the course in good times and bad times to
achieve our goals, we will stay strong in the face of new challenges by being
flexible - continuously adapting and improving. As a subsidiary of LankaBangla
Finance, LBIL is backed by its wide range of financial service providing
expertise. LBIL sees opportunities in corporate, institutional and investment
banking via the building of synergistic alliances among businesses with that of the
LankaBangla Finance and taking brokerage service from LankaBangla Securities
Limited, the top broker in country.

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Integrity
LBIL practices uncompromising integrity and ethics in all of its dealings. Backed
by LBIL’s rigorously specified and documented code of ethics and professional
conduct, LBIL employees are always properly aware about the most updated laws
and regulations regarding capital market and other operations. LBIL truly believes
that acting ethically is imperative to build an efficient and well-structured capital
market and it’s mandatory for the employees of LBIL to be properly aware and
abide by the rules and regulations of governing body as well as act according to
the code of conduct of LBIL.

Trust
By orienting our interests with those of our clients, LBIL has become a trusted
partner for retail investors, institutional investors and business partners. Many of
the top institutions in country value and trust LBIL as their prime business partner
and corporate-financial advisor. Advisory clients recognize that we bring a deep
understanding of their strategic objectives and a commitment to provide effective
solutions to all assignments.

Clients First
From its earliest days, LBIL has come to believe that client’s interest comes before
everything else. Clients first stand for professionalism, trust and a devotion to
excellence. It’s the clients for which we are here all time and it’s the most
important motto of LBIL to serve our clients in a way that maintains their best
interest.

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1.6 LankaBangla Investments Limited Organogram

Primary Market
Service

Business
Development

Investment Banking
Service

Research
LBIL Board Of Directors

Portfolio
Management Service

CEO CCO Human Resource

Credit Administration

Administration

IT & Settlement

Compliance

Finance & Accounts

Page | 6
1.7 Milestones

• First merchant bank to offer discretionary portfoliomanagement services

1997

• Introduced New Products Under Discretionary

2012 portfolio Management Services

• Completed Price Discovery of 1st issue under

2013 revised Book-building Method

• LaunchedAlphaPlus-Initial Received Consent for Public Subscription of

UPGDCL under Revised Book Building Method
2014

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1.8 Products and Services
LankaBangla investments Limited provides different types of products and services to
their clients. It helps their clients to take better investment decision and ensure superior
return. The chart of product and services shown bellow

Products and Services

Portfolio Management Primary Market Investment Banking

Services Services Services

Non-Discretionary Issue Management

Portfolio (IPA Scheme)

Discretionary Portfolio
Management (AlphaPlus) Underwriting

Corporate and Financial

Advisory

1.8.1 Portfolio Management Services

LBIL offers two types of Portfolio Management Services. One of them is discretionary
portfolio account, “AlphaPlus” (managed by Investment Team of LBIL) and another one
is Non-Discretionary portfolio account (Managed by clients).

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 Non-Discretionary Portfolio (IPA Scheme)
LankaBangla Investments provides comprehensive non-discretionary services
including trade execution and margin loan under its Investors Portfolio account
called ‘IPA Scheme’. We are capable of executing proper and efficient trades
through our designated sister concern ‘LankaBangla Securities Ltd’, the largest
stock broker of the country. Feature of IPA Scheme given bellow
 Clients have absolute discretionary power to make their buy and sell
decisions from the securities approved by the portfolio manager.
 All the securities purchased by the clients shall remain in line in favor
of portfolio manager.
 Portfolio manager will administer the investment of the clients and also
provide the total custodian services.
 Clients will enjoy trading facility in both the Dhaka and Chittagong
Stock Exchange.
 To facilitate the clients to enhance their return on investments through
leveraging, the portfolio manager will extend margin loan to the
clients.
 No restriction on capital withdrawal by the clients.
 Fund management fee is one of the lowest in the industry.
 No trigger selling without discussing with the client.

 Discretionary Portfolio Management (AlphaPlus)

In the ever changing capital market, managing investment has become an
increasingly complex and time consuming process for a company or an individual
to handle in isolation. For effective investment, client has to go through the hassle
of following tons of financial data and market information continuously. To relieve
investors from this never ending process, LBIL here with, their very own
discretionary portfolio management service exclusively designed for clients’
investment needs where:

 Dedicated investment managers will look after clients investments with

their best judgment and market outlook.
 Investment policy will be specially designed to attain client individual
goals and objectives.
 All the market related data and information will be closely monitored
on the behalf of clients.
 Appropriate securities will be identified according to clients investment
needs.
 Forecasting and judging possible market movements will take place
with proper scrutiny.
 Investment process will be highly professional with strict risk analysis.

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  Rebalancing of client’s portfolio will be done according to market
scenario and future predication.

For the business entities who want to grow and diversify their assets through
capital market investments to achieve goals like

 Growing funds for future capital expansion & future working capital
needs.
 Growing funds to hedge against any future obligation.
 Taking tax benefits through capital market investments.
 Diversifying investments of foreign companies through capital market
of Bangladesh.

1.8.2 Primary Market Services

LankaBangla Investments Limited provides distinguish primary market services for their
clients. Services are issue management, underwriting, corporate and financial advisory.

 Issue Management
LBIL helps companies with good growth potential and excellent business ideas
raise fund through initial public offering. Through LBIL’s issue management
services it not only aid clients to increase the value of their company but also aid
in increasing the supply of quality shares in the capital market. LBIL manage
issues for Initial Public Offering (IPO), Repeat Public Offering (RPO), Bonds, and
Preference Shares. The Issue Management Team has wide experience in managing
the different types of issues across various industries, leading to in-depth
knowledge of the regulatory issues and processes. Their services include:
consultancy services, regulatory compliance fulfillment, valuation of securities,
price discovery and book building, underwriting cooperation, public offer and
subscription management, and Right Issue/Offer management into successful
completion.

 Underwriting
LBIL provides underwriting services for public issues to create efficiencies in the
capital markets and reduce risk for new, repeat and right issues. LBIL has
underwritten a large number of issues in various industries.

 Corporate and Financial Advisory

In today's environment of complex transactions and competitive markets,
increasing the value of business requires skills and experience. Thus LBIL helps
clients to undertake the right decision the right way to make their business more
competitive and profitable by providing integrated and objective advisory
services. They provide assistance in due diligence, support the creation of financial

Page | 10
 models, act as financial advisors, aid in overall project management and provide
solutions on financial and corporate matters. Whatever the size, nature or location of
a company or deal - they can play a critical role throughout the deal lifecycle.
LBIL also provides restructuring advisory services to underperforming companies
and companies experiencing liquidity problems, in all sectors and in all markets.
They provide a prompt and strategic review of the situation and then develop and
implement a tailored strategy to help turn around business performance.

 Mergers and Acquisitions

LankaBangla Investments Ltd acts as the financial advisor for the total
Merger or Acquisition transaction whether the client is the bidder or
the target. LankaBangla Investments Ltd acts as the financial advisor
for the total merger or acquisition transaction whether the client is the
bidder or the target. The experienced M&A advisors at LBIL help
companies steer through profitable opportunities starting from
origination to closure. Their work includes identification of the business
to be acquired, strategic planning of the acquisition, valuations,
transaction structuring, negotiation with parties, advice on financing,
supervising due diligence, legal and other issues to work towards
successful completion.

 Divestiture
A divestiture is the activity of completely or partially selling an
investment in an internal trading partner to an "external organization",
that is to a company that does not belong to the subgroup or
consolidated group. LBIL as a part of advisory activity engages in
counseling for divestiture procedures like: whether to divest slowly
over time or in a chunk, analysis of divestiture on capital market,
financial reporting adjustments, determination of realistic price
expectation, prepare marketing documents, Discreetly locate multiple
qualified buyers, Negotiate on behalf of the sellers to obtain the best
selling price, arrange financing to make the transaction a reality and so
on.

1.8.3 Investment Banking Services

LBIL covers all possible Investments Banking services for its clients. One stop service
solution, diversified service offering and high team morale leads LBIL to attain client’s
confidence and provide better experience for its clients.

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 CHAPTER 2

PROJECT OVERVIEW

Page | 12
2.1 Introduction
Companies need to make investment for the consistent growth in business. The
companies required internal and external financing for their investments. Companies have
different alternative options of collecting fund internally and externally. Companies can
use retained earnings as an internal financing. For external financing, they can collect loan
from creditors, issue debt securities, and involve partners.

By selling share to public through capital market a company can raise their fund. When a
company offers share to public through capital market, the company become listed or
public company. At first company has to sell their share in primary market and after that
the company become able to trade in secondary market (capital market). This process is
called as initial public offering (IPO).

The selling price of shares in primary market is predetermined but the prices of share in
secondary market are determined based on market mechanism or demand for and supply of
shares. There is a problem in IPO of primary market. The problem is underpricing of
stock in IPO. The IPO underpricing is the focus point of this study. When the offering
price of a stock in primary market is lower than the first day closing price of that stock in
secondary market then it is called IPO underpricing. Underpricing mainly occur due to
information asymmetry between investors and owners.

2.2 Problem Statement

Initial Public Offering (IPO) means when a company or issuing firm offers to sell its
share to public and collect fund from the market. Before trading in secondary market
companies need sell share in primary market through IPO. But there is a problem in IPO,
it is called underpricing of stock. When the offering price of a stock in primary market is
lower than the first day closing price of that stock in secondary market then it is called
IPO underpricing.

2.3 Objective of the Report

By the preparation of the report on IPO underpricing in Bangladesh the following objective
is fulfilled

 Gain knowledge about the stock market of Bangladesh.

 Get idea about the IPO process
 Finding out IPO underpricing and initial return of Bangladesh and other
different stock exchanges.
 Determining the reasons behind underpricing in Bangladesh

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2.4 Limitation of the Report
To prepare the report effectively and efficiently, I have tried my best give up to the mark
output. But due to lack of experience, extensive knowledge and lack of information
accessibility etc there has some limitation in the report.
 Data collecting, analyzing, integrating and presenting is time consuming.
 Unavailability of preceding and latest data
 Due to maintain the confidentiality of the organization, unable to collect
data.
 Secondary sources of data are not available regarding the report study
topic. Such as Journals, Articles and so on.
 Mainly secondary sources of data are used.
 The analyzing and findings of the study is based on short term work
experience which may arise the question about the quality of report.

2.5 Methodology
2.5.1 Sample

For the purpose of the study, chose 140 IPOs as sample from following sectors and which
are listed in DSE.

 Bank
 Cement
 Ceramics
 Engineering
 Corporate Bond
 Financial Institution
 Food & Allied
 Fuel & Power
 Insurance
 IT
 Miscellaneous
 Mutual Fund
 Paper & Printing
 Pharmaceuticals & Chemical
 Service & Real Estate
 Telecommunication
 Textile
 Travel & Leisure

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2.5.2 Time Period
IPOs which issued during the period of 2006 to 2015 take as sample for the purpose of
study.
2.5.3 Computation
To calculate IPO underpricing or overpricing, Offer price of a stock is subtract from closing
price and divide by offer price.
Rj,t = [Pj, t - Pj, 0]/Pj,0

Where Rj, t is the return of stock j in the period t, Pj,t is the price of stock j at the period t,
and Pj, 0 is the offer price of stock j.

2.5.4 Source of Data

Gathering information of 140 IPOs and 2006-2015 time period is selected as a time series
for the study. The offer price and the first day closing price of trading is used as critical
sources of data. The main source of information is Dhaka Stock Exchange. Information are
collected from secondary sources and the sources are given bellow
 Dhaka Stock Exchange
 Website of World Bank
 Website of International Monetary Fund (IMF)
 LankaBangla Investment Limited Library
 Different Journals, Books, Periodicals, News Papers etc.

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2.6 Evidence from Major Stock Exchanges
In 1978 the researcher Reilly did a research on IPO underpricing of different stock
exchanges across the world. He took 1972 to 1975 as a sample time period for the
research. The objective of his research was that all stock exchange follow the same
underpricing issues. The research showed that on an average new issued share provide
higher return in the first week when it’s traded in secondary market but the return is
mixed within a year.

A summary of average initial returns on IPOs across the major stock markets is shown in
Table 1 as follows.

Table 1: Average initial returns in Major

Countr Sample Time Average Initial

y Size Period Return
Australia 381 1976 - 1995 12.1%
Austria 76 1984 - 1999 6.5%
Belgium 28 1984 - 1990 10.1%
Brazil 62 1979 - 1990 78.5%
Canada 258 1971 - 1992 5.4%
Chile 55 1982 - 1997 8.8%
Denmark 117 1984 - 1998 6.4%
Finland 85 1984 - 1992 9.6%
France 187 1983 - 1992 4.2%
Germany 407 1978 - 1999 27.7%
Greece 79 1987 - 1991 48.5%
Israel 28 1993 - 1994 4.5%
Italy 135 1985 - 1998 20.3%
Mexico 37 1987 - 1990 33%
Netherlands 143 1982 - 1999 10.2%
New 201 1979 - 1999 23%
Zealand
Nigeria 63 1989 - 1993 19.1%
Norway 68 1984 - 1996 12.5%
Poland 149 1991 -1998 35.6%
Portugal 62 1986 - 1987 54.4%
Spain 71 1985 - 1990 35%
Sweeden 251 1980 -1994 34.1%
Switzerland 42 1983 - 1989 35.8%

Source: Loughran et al (2000)

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2.7 Evidence from Asian Stock Exchanges
Many researchers worked on IPO behavior and after market performance. The main focus
point of this study is IPO underpricing, beside that the initial return and market efficiency.

In 1999 Md Sadequl Islam make research on Dhaka Stock exchange and find that during the
period between 1994-1999, the average initial returns is 116.01 percent and the standard
deviation is 261.94 percent. In 2002 another research which done by other researchers show
that the IPO was largely underpriced. The percentage of underprice was 285.21 percent of
IPO of DSE within the period of 1994 and 2001.

The IPO underpricing is so higher in China. Researchers Mok and Hui found that in 1998 the
underpricing of a share in Shanghai is 289 percent. In 1999 the extensive research of Su and
Fleisher showed that if the IPOs of earlier years were included as sample the underpricing
percentage could go above 948 percent.

The average initial returns in Asian Stock Markets are shown below:

Table 2: Average initial returns in Asian Stock Markets

Countr Sample Time Average Initial

y Size Period Return
Bangladesh 95 1994 - 1999 116.01%
China 226 1990 - 1996 388 %
Hongkong 334 1980 - 1996 15.9%
India 500 1992-1996 96.56%
Japan 975 1970 - 1996 24%
Korea 347 1980 -1990 78.1%
Malaysia 401 1980 – 1998 104.1%

Philippines 104 1987 - 1997 22.7%

Singapore 128 1973 - 1992 31.4%
Taiwan 241 1986 - 1995 34.6%
Thailand 32 1988 - 1989 58.1%
Turkey 138 1990 - 1996 13.6%

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2.8 Bangladesh Capital Market Brief Overview
The capital market of Bangladesh and the size of economy are quite small compared to other
regional market. Generally a capital market of a country has two segments, one is the stock
market and another is the debt market. But the Bangladesh capital market has only stock
market in active operation and debt market is in prefatory stage. Although the stock market of
Bangladesh has active operation but it is still small. Due to lack of incentive facilities, less
interest of local business and complex regulatory regime over last 23 years, 287 companies of
22 sectors are listed in DSE.

Government tries their best to attract growing privet companies through different incentive
time to time so that companies listed as public limited. But on an average only 15 companies
are listed in stock market each year. Due to this reason market capital of listed companies as
percentage of GDP is low compared to other countries.

Table 3: Market capital of listed companies as percentage of GDP (As of December

2015)

Countr 2011 2012 2013 2014

y
Australia 86.2 90.2 87.3 88.6
Bangladesh 33.23 26.27 25.51 24.13
Canada 106.9 112.4 114.9 117.4
Germany 31.5 42 51.7 44.9
India 54.9 69 61.2 76.1
Malaysia 132.8 148.4 154.8 135.8
United States 100.8 115.5 143.3 151.2
(Dhaka Stock Exchange, 2016)
Source: www.devdata.worldbank.org
Capital market is a key source of capital in other countries of the world. In Bangladesh the
industrialization has picked its pace almost three decades back but capital market cannot
create attraction as a key source of capital towards our countries entrepreneurs. But on the
other hand banking system of our country is highly attractive as a source of capital for
entrepreneur. That is why the capital market of our country has lowest market capital as
percentage of GDP compared to other country and our economy size can’t expand yet.
There are two stocks in Bangladesh, one is Dhaka Stock Exchange DSC which established in
1954 and another one is Chittagong Stock Exchange CSE which established in 1995. Both
stocks conduct their trading through Computerized Automated Trading System. Although
both exchanges are self-regulated but their operating rules are approved by Securities and
Exchange Commission SEC

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As of 31 December 2015, the market capitalization of Dhaka Stock Exchange is USD
40,118.81 and turnover value is USD 13,251.94. According to the preceding table
Bangladesh’s stock market is weak not only in regional market but also in SAAR countries.
Where the Karachi, Colombo and Bombay stock exchange has listed respectively 554, 294
and 5836 companies there Dhaka Stock Exchange listed only 287 companies. The turnover
and market capital to GDP of those exchange are also higher than DSE.

Page | 19
2.9 Level of Underpricing/Overpricing
The following chart shows the overall IPO underpricing and overpricing level in Dhaka Stock
Exchange. According to the chart there are 91 percent companies IPO price is underpriced and
8.5 percent companies IPO price is overpriced and only 0.50 percent of companies IPO price
remain same.

IPO Pricing

Underpriced Overpriced Similar Pricing

Among 140 companies there are 127 companies are underpriced their IPO and only 12
companies overpriced their IPO. The underpriced IPO companies show mean return 241.39
percent with the standard deviation 274 percent. It means investors on an average earn
241.39 percent by investing in underpriced IPO with the standard deviation 274 percent.

Table 4: Descriptive Statistics

Number of Mean Maximu Minimu Standard

companies Return m m Deviation
Underpricing 127 241.39% 1531% 1% 274%
Overpricing 12 22.16% 78.13% 0.42% 26.03%
Similar Pricing 01 00 00 00 00

Total 140 217% 1531% .42% 272%

The maximum return 1513% was gained from Padma Islami life Insurance. In 2012 this
company hits the market. Second highest return 1527 percent was gained from Rupali Life
Insurance in the year of 2009. The minimum return was 1 percent which earned from AB Bank
Mutual Fund.

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In the 10 years period, among the 140 IPOs 12 companies IPO is overpriced. The average
overprice is 22.16 percent and standard deviation of 26.03 percent. The ACI Limited Zero
coupon bond was most highly overpriced. The offer price was BDT 3743 and closing price
was BDT 818.5. Due to this investors has to face loss of 78 percent. Lowest overpriced was
done by Aamra Technologies. There offering price was BDT 24 and closing price was BDT
23.9. Among the 140 IPOs, EBL NRB Mutual Fund was accurately priced. Its offer price and
closing price was BDT 10.

2.10 IPO Underpricing on Yearly Basis

The highest degree of underpricing was recorded in the year of 2009 where the mean return
was 371.63 percent with standard deviation of 328.02 percent. In this year 18 companies
were listed in DSE. The second highest degree of underpricing was recorded in 2008. In that
year mean return was 328.58 percent with standard deviation 299.10 percent and 12
companies were listed. The third highest degree of underpricing was recorded in 2014. In that
year the mean return was 274.54 percent with standard deviation 221.85 percent and 17
companies were listed in DSE.

The lowest number of underpricing is recoded in 2015. In that year 16 companies were listed
and mean return was 120.35 percent with standard deviation 121.70 percent. And the second
lowest underpricing was recorded in 2011. In that year 14 companies were listed and mean
return was 140.61 percent with standard deviation 236.48 percent.

Table 5: Descriptive Statistics

Yea Number of Mean Standard Maximu Minimum

r Companies Return Deviation m
2006 11 154.34% 120.59% 354% 13.50%
2007 14 174.06% 125.12% 466.17% 24.00%
2008 12 328.58% 299.10% 829.00% 48.75%
2009 18 371.63% 328.02% 1527.50% 135.00%
2010 14 269.41% 405.69% 1262% 9%
2011 14 140.61% 236.48% 640% 0%
2012 14 206.93% 428.70% 1531.00% 1.00%
2013 16 205.97% 199.66% 721.00% 1.00%
2014 17 274.54% 221.85% 673.00% 13.24%
2015 16 120.35% 121.70% 377% 2%
(Dhaka Stock Exchange , 2016)

Page | 21
 Yearly Mean Return
400.00% 371.63%
350.00% 328.58%

300.00% 269.41% 274.54%

250.00%
206.93% 205.97%
200.00% 174.06%
154.34%
140.61%
150.00% 120.35%
100.00%
50.00%
0.00%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

In 2010 and 2011, 14 companies were listed in DSE. Among 14 companies 11 companies were
underpriced. In the year of 2007,2009,2013,2014 all the listed companies were underpriced.
Among 10 years the highest underpricing is done by Padma Islami Life Insurance in 2012.

2.11 IPO Underpricing on Sector Basis

The highest degree of underpricing was recorded by pharmaceuticals sector. The sector has
mean return 514.21 with standard deviation 356.10. In this sector Active Fine chemicals
reported highest underpricing. The underpricing of Active Fine Chemicals provides return
1262 percent. The second highest degree of underpricing was recorded by miscellaneous
sector. The sector provided average return 496 percent with standard deviation 241 percent.
And the third highest degree of underpricing was recorded by insurance sector. It provides
mean return of 422 percent with standard deviation 479 percent.

The ceramic industry shows an exceptional degree of underpricing. It reported fourth highest
degree of underpricing but just only one company and that is RAK ceramics. This company
has listed for a long run in DSE.

The corporate bond and fuel sector reported minimum degree of underpricing. The corporate
bond and fuel sectors provide average return 41.45 percent and 42.09 percent respectively.

All the IPOs which are listed with bank, cement, pharmaceuticals, engineering, food,
telecommunication, travel, and fuel sector were underpriced. Among the 10 years period the
highest underprice is recorded by Padma Islami life Insurance under insurance sector and the
lowest underprice is recorded by First Bangladesh Fixed Income Fund under mutual fund
sector.

Page | 22
 Table 6: Descriptive Statistics

Yea No of Mean Standard Max Minimu

r Companie Return Deviation m
s
Bank 08 219.23% 136.67% 466.17% 93.25%
Cement 02 206.46% 231.92% 370.45% 42.47%
Ceramics 01 332.92%
Corporate Bond 03 41.45%
Engineering 13 253.66% 223.61% 673.00% 13.50%
Financial 14 253.45% 230.41% 829.00% 71.63%
Institution
Food 03 238.53% 147.78% 400.00% 110.00%
Fuel 05 42.09% 29.48% 86.94% 7.50%
Insurance 18 422% 479% 1531% 24%
IT 02 90.00%
Miscellaneous 02 496% 241% 666% 325%
Mutual Fund 31 91.42% 133.31% 616% 0%
Paper & Printing 01 271.00%
Pharmaceuticals 09 514.21% 356.10% 1262.00% 25.33%
Real Estate 01 138.00%
Telecommunicatio 02 110.21% 60.91% 153.29% 67.14%
n
Textile 21 208.35% 151.53% 531.00% 6.00%
Travel 03 54.03% 71.36% 135.75% 4.00%

Page | 23
 Mean Return
600.00%
514.21%
496%
500.00%
422%
400.00%
332.92%

300.00% 271.00%
253.45%
219.23% 253.66% 238.53% 208.35%
206.46%
200.00%
138.00%
90.00% 91.42% 110.21%
100.00% 54.03%
41.45% 42.09%

0.00%

Page | 24
2.12 Reasons of Underpricing
 The Market Feedback Hypothesis
When a company use book building method the company tries to generate, capture
and record investor demand for the share in IPO. Generally this function is done by
investment banker on behalf of issuing firm. These information are collected in pre-
issuing period of share in IPO. Based on the collected information, an investment bank
set price for an IPO. To collect actual valuation from investor about new issue,
investment banker provides real information about new issue to specific regular
investor. Through underpricing investment banker ensure benefit for both issuing firm
and investors.

 The Bandwagon Hypothesis

The bandwagon effects arise when the potential investors not only pay attention on
their own information about a new issue but also whether other investors are
purchasing. If an investor sees that no other investor want to buy a new share, he or
she may decide not to buy that share even though he or she has favorable information.
To prevent bandwagon effect, issuer may underprice a new issued share share and
attract first few potential investors to buy. On the other hand the issuer also ensures
that potential investor keep trust on their own information. By this demand for that
share increases in the market.

 The Investment Banker's Monopoly Power Hypothesis

Other reason of underpricing is monopoly power of investment bankers over issuer.
According to the Glass Steagall Act the commercial banks cannot participate in equity
underwriting. So the investment banker enjoys less competition and strong monopoly
power. The investment bankers have superior knowledge about market condition and
they utilize that knowledge to underprice the new issue. By this they become able to
attract investors to buy share and they have to give less effort in marketing. Through
the underpricing a monopolist investment banker increase the probability of being
able to sell the whole issue to investors, thereby minimizing his risk. And they become
able to create a good image in market.

 The Due Diligence Hypothesis

According to the securities Act 1933, all participants who sign the prospectus are liable
for any material omission from prospectus. After purchasing share from IPO and first
day trading in secondary market, investor tries to find out why they face loss?
Investors analyze that, is there any solid information omitted? If investors find that
any vital information is omitted then investor can take legal action against investment
banker and company director for publishing misleading information. This negative
legal action makes adverse publicity about investment banker and the reputation of

Page | 25
 investment banker is hampered in the market. To avoid this problem and ensure
investors profit investment bankers underprice the stock price in IPO.

 The Signaling Hypothesis

When an investment bank issue a share for first time in underprice and investors earn
expected or more than expected amount of return then a good test is creates in the
market about the stock and that investment bank. If that investment bank issue shares of
other firm or second issue of previous firm then it does not have to pay hard effort to
attract investors.

 Problem of “Winner’s Curse”

This theory is described by Beatty and Ritter. There are two types of investors in IPO
Market. One is informed and another one is uninformed. But the number of
uninformed investor is high. The degree of underpricing is depends on the degree of
information asymmetry. There are two type of IPO; one is good issue another one is
bad issue. The informed investors expend their resource to collect information. And
based on information informed investor bid for good issue. Through the research
informed investors find the true value of IPO.
Uninformed investors don’t research to collect information about the value of IPO.
However they bid for all type of issue, good issue or bad issue. On the other hand, the
number of informed investor is minimum. So it’s not possible for informed investors
to buy whole issue.
Let consider the good issue, here informed and uninformed investor bid for the issue.
Due to both group invest for good issue so individual investor specially uninformed
buyer get partial allotment of the issue.
And in the bad issue, the informed investors never invest. Only the uninformed
investor invest in it. In case of this, due to the absence of informed investor the
competition remains low. So any individual bidder will more likely to get full allotment
and on the secondary market trading period they face loss. And for this, the
uninformed investors face the problem of “winner’s curse”
Beatty and Ritter support IPO underpricing because uninformed investor face losses
for lack of information about good issue and bad issue. On an average, if issues are
underpriced then all investors attract for investment and uninformed investor able to
gain their expected return.

 The Ownership Dispersion Hypothesis

Sometimes issuing firm intentionally underprice their share so that they can generate
excess demand for the share. And by this the issuing firm becomes able to distribute
their share to large number of small and big investors. If specific group of investors
owe maximum number of shares then it would be threat for company ownership.
Through underpricing issuing farm can avoid such problem.

Page | 26
 Underpricing as a Dynamic Strategy
Now a days underpricing is used as a dynamic strategy of the issuing firm. Through
underpricing the companies try to persuade investors to collect information about the
firm. When investors research on a company then he or she finds the real value of IPO.
And by this investors become confident about getting higher return in secondary
market if the stock is underpriced. Underpricing helps to build good image of the
company and treat the issue as a good issue.

Generally good company tends to underprice their stocks more. Because when they
can assure investors that their share gives higher return in secondary market then the
issuing firm can make new issue at higher price. And by this the issuing firm reduces
the cost of issue and run their business in the stock market for a long run with stable
growth.

On the other hand bad companies tends to issue share at overprice. Because by the
research if investors find that the company is bad then it will be difficult for them to
further issue stocks. So the bad companies try to collect as much as possible liquid
cash from their first issue.

Page | 27
 CHAPTER 3

Conclusion and Recommendations

Page | 28
3.1 Conclusion
At the end of the study it is clear that the IPO underpricing is a common phenomenon in
primary market. Through IPO underpricing investors can earn maximum amount of profit
from their investments and issuing firm can raise maximum amount of capital from stock
market. But underpricing is considered as a contradictory factor for market efficiency. In the
field of finance, IPO underpricing is a well debated topic. The key reasons of IPO
underpricingis information asymmetry between investors and owners.

Based on the study in Bangladesh among the 140 listed companies of Dhaka Stock Exchange,
127 companies IPO is underpriced and 12 companies IPO is overprices and rest of the
company’s IPO remain same. The study shows that 91 percent companies stocks are
underprice its share, 8.5 percent companies IPO is overpriced and .50 percent companies IPO
is remain same. The IPO underpriced companies provide average return 241.39 percent with
standard deviation 274 percent and maximum return from underpricing 1531 percent and
minimum return form IPO underpricing is 1 percent. Maximum return was 1531 percent
which was gained on Padma Islami Life Insurance which hit the market in 2012. The only
IPO correctly priced was EBL NRB Mutual Fund in 2011.

In 2009 the highest degree of underpricing is recorded and 18 companies were listed. In that
year average return from IPO underpricing was 371.63 percent with standard deviation
328.02 percent. The maximum degree of underpricing was 1527.50 percent. The lowest
degree of underpricing was recorded in 2015. In that year mean return was 120.35 percent
with standard deviation 121.70 percent and 16 companies were listed in DSE same year. The
pharmaceutical sector has the highest degree of underpricing. It provides mean return from
underpricing is 514.21 percent with standard deviation 356.10 percent.

There many reasons of underpricing are the market feedback hypothesis, the bandwagon
hypothesis, the investment banker’s monopoly power hypothesis, the due diligence
hypothesis, the signaling hypothesis, problem of “Winner’s Curse”, the ownership dispersion
hypothesis and underpricing as a dynamic strategy. Based on the observation it can say that
the Bangladesh stock exchange as well as other stock exchanges in globe require long time to
come out from the IPO underpricing trend.

Page | 29
3.2 Recommendations
Based on the study to avoid and reduce underpricing the following issues can be considered.

 The main reason of underpricing is information asymmetry between investors and

owners. This information gap occurs due to investment banks and lack of sources to
collect information. To overcome this problem Security Exchange Commission can
offer a service where SEC can provide training facility for investor about how they can
collect information and make investment decision.
On the other hand sometimes issuing company or owner cannot identify the actual
value of its share. Therefore, SEC can provide a service for issuing firm by which the
firms can identify the actual value of its share then the problem may minimize.
 According to Glass Steagall Act commercial banks cannot participate in equity
underwriting. So investment banks enjoy monopoly power in IPO (primary market).
To solve this problem more investment bank can be permitted by SEC to operate their
operation. When competition increases then monopoly power will reduce.
 Due to shaky condition of stock market, investors like to invest for a short run in the
stock market and want to earn maximum profit. So to attract investor investment
banker and issuing firm underprice IPO. If the stock market condition becomes stable
then investor may think for long run investment and issuing company may not focus
on IPO underpricing.

Page | 30
3.3 Learning Outcomes
I am attaching with credit admin department but also working with research, accounts and
finance department. In the credit admin department the receipt of letter is checked with the
LankaBangla Investments Limited record. The letters are send by LankaBangla Investments
Limited. If the client gets the letter then give input that letter is received and if client does not
get the letter then give input the letter back to LBIL. After that, try to find out the reason why
the letter is backed by customer. Credit admin department collect information by contacting
with client through mail and calling or through the courier company.

In the research department, make research on Dhaka Stock Exchange website and find out the
company trading code which is listed in DSE. By using the code collect information
regarding the company’s shareholding ratio. After that, make a list of the companies that
contains the shareholding structure and ratio. Generally this list is making sector basis. This
research gives an idea about company condition. Another task of research department is study
the annual report of individual company of a specific sector and from that find out earnings
before tax, earnings after tax, earning per share, price earnings ratio of the company. After
collecting that information make company and sector wise list.
In accounts and finance department, give input from the ledger of LankaBangla Investments
Limited in excel sheet. They make monthly ledger and list every month. This list is an
extensive record of all the transaction which conducted by LBIL. It works as a record which
helps to make future decisions and solve the problems of past.

I am also working with human resource department. In this department by the supervision of
human resource executive make employee information list. If any new employee is recruiting
then his or her overall information is organized by the instruction of human resource
executive.
Overall experience is very interesting because I am a student of finance but getting the idea
about multiple departments. This helps me to understand the job responsibility and scope of
every department. And this expand my knowledge about corporate function as well as due to
work with different department getting idea about corporate culture.

Page | 31
Reference

Dhaka Stock Exchange. (2016, 11 11). Performance of DSE at a glance. Retrieved from
DhakaStock Exchange: http://www.dsebd.org/mglc.php

Dhaka Stock Exchange. (2016). IPO Archive. Retrieved from Dhaka Stock Exchange:
http://www.dsebd.org/ipo_archive.php

Aggarwal, Reena; Rivoli, Pietra. 1990, Fads in the initial public offeringmarket? Financial
Management, Winter 90, Vol. 19 Issue 4, pp 45.

Baron, David P., 1982. A Model of the Demand for Investment Banking Advising and
Distribution Services for New Issues, Journal of Finance 37, 955—976.

Barry, C.B. and Brown, S., 1985. Differential information and security market equilibrium.
Journal of Financial Quantitative Analysis 20, pp. 407–422.

Beatty, R.P. and J.R. Ritter, 1986, Investment Banking, Reputation andUnderpricing of
Initial Public Offerings, Journal of Financial Economics,15 (Jan/Feb), pp. 213-232.

Dawson Steven M. 1987, Secondary stock market performance of initialpublic offers:

HHong Kong, Singapore and Malaysia, Journal of Business

Grinblatt, Mark, and Chuan Yang Hwang, 1989. Signalling and the Pricing of New Issues,
Journal of Finance 44, 393—420.
Islam, M. Sadequl, 1999, The behavior of IPO underpricing in Bangladesh, Journal of
Financeand Banking, Vol 5, Number 1 & 2, June and December.

Loughran, T., and Ritter J.R. 1997. The operating performance of firms conducting seasoned
equity offerings. The Journal of Finance, 54, 165-201

Lowry, Michelle and G. William Schwert, 2004, Is the IPO pricing processefficient?
Journal of Financial Economics 71, 3-26.

Mok. H.M., and Hui, Y.V. 1998. Underpricing and the aftermarket performance of IPOs
in Shanhai, China, Pacific-Basin Finance Journal 6, 453 – 474.

Muscarella, C J and Vetsuypens, M R, 1989, A simple test of Baron's model of IPO

underpricing,Journal of Financial Economics 24, 125–135.

Reilly, F K, 1973, Further evidence on short-run results for new issue investors,Journal
of Financial and Quantitative Analysis 8, 83–90.

Ritter, J.R. 1984. Signaling and the Evaluation of Unseasoned New Issues: AComment, The
Journal of Finance, 39, 1231-1237.

Rock, K. 1986. Why New Issue are Under Priced, Journal of Financial Economics, 15, 187-212.

Page | 32
Appendix

Table: Return and Underpricing/Overpricing Calculations

Sl Offer Closing
Name Return Underpriced/Overprice
no Price Price
d
1 Diffodil Computers Limited 10 19 90.00% Underpriced
Asia Pacific General
100 59.25 -40.75% Overpriced
2 Insurance
3 Sonar Bangla Insurance 100 61 -39.00% Overpriced
4 Pragati Life Insurance 100 439.25 339.25% Underpriced
Jamuna Bank Ltd.(20%
120 245.75 104.79% Underpriced
5 premium)
6 S. Alam Cold Roled Stees Ltd. 100 113.5 13.50% Underpriced
7 Lankabangla Finance 10 21.4 114.00% Underpriced
8 BIFC 100 189.75 89.75% Underpriced
9 IPDC (100% premium) 200 343.25 71.63% Underpriced
BRAC Bank Ltd (70%
170 531.5 212.65% Underpriced
10 Premium)
11 Prime Islami Life Ins. Co. 100 453.5 353.50% Underpriced
12 Shahjalal Islami Bank 100 278 178.00% Underpriced
13 ICB AMCL 1st NRB MF 100 224.5 124.50% Underpriced
14 Golden Son 10 19.2 92.00% Underpriced
15 Premier Bank 100 360.5 260.50% Underpriced
16 Union Capital Ltd 10 33.7 237.00% Underpriced
17 BD Finance 100 220.25 120.25% Underpriced
18 ILFSL(125% Premium) 225 734.5 226.44% Underpriced
Phoenix Finance &
100 424.25 324.25% Underpriced
19 Investments
20 Trust Bank(50% Premium) 150 849.25 466.17% Underpriced
21 Paramount Insurance 100 124 24.00% Underpriced
22 City General Insurance 100 159.75 59.75% Underpriced
IBBL Mudaraba Perpetual
1000 1,414.50 41.45% Underpriced
23 Bond
Fidelity Assets & Securities
100 325 225.00% Underpriced
24 Co. Ltd.
Continental Insurance
100 157.5 57.50% Underpriced
25 Limited
Delta Brac Housing Finance
210 1,563.25 644.40% Underpriced
26 Ltd.
ICB AMCL Second NRB
100 190 90.00% Underpriced
27 Mutual Fund*
Grameen One:Scheme
100 43 -57.00% Overpriced
28 Two**
29 First Security Bank Limited 100 193.25 93.25% Underpriced

Page | 33
30 Summit Alliance Port Limited 100 879.25 779.25% Underpriced
Takaful Islami Insurance
100 336.5 236.50% Underpriced
31 Limited
32 Standard Insurance Limited 100 148.75 48.75% Underpriced
Northern General Insurance
100 162 62.00% Underpriced
33 Company Limited
National Housing Finance &
100 929 829.00% Underpriced
34 Investments Ltd.
Maksons Spinning Mills
10 42 320.00% Underpriced
35 Limited
36 Republic Insurance Co. Ltd. 100 181.75 81.75% Underpriced
37 BSRM Steels Limited 100 529.5 429.50% Underpriced
38 Prime Finance First M.F 10 71.6 616.00% Underpriced
Bay Leasing & Investment
250 784.75 213.90% Underpriced
39 Ltd
40 Asia Insurance Ltd 100 404 304.00% Underpriced
41 Rupali Life Insurance 100 1627.5 1527.50% Underpriced
42 EBL 1st MF 10 34.9 249.00% Underpriced
43 Marico Bangladesh Ltd. 90 351.5 290.56% Underpriced
44 Islami Insurance BD. Ltd. 100 462 362.00% Underpriced
45 ICB AMCL 2nd M.F. 100 266 166.00% Underpriced
46 The Dacca Dyeing 10 63.1 531.00% Underpriced
47 Grameen Phone 70 177.3 153.29% Underpriced
48 Golden Son Limited (RPO) 20 56.9 184.50% Underpriced
49 Provati Insurance Co. Ltd. 100 559.25 459.25% Underpriced
ICB Employee Provident
10 25 150.00% Underpriced
50 Mutual Fund One
51 Trust Bank 1st Mutual Fund 10 27 170.00% Underpriced
Prime Bank 1st ICB AMCL
10 23.5 135.00% Underpriced
52 Mutual Fund
53 DBH 1st Mutual Fund 10 28.6 186.00% Underpriced
54 R.N. Spinning Mills Ltd. 100 514.5 414.50% Underpriced
55 Dhaka Insurance Ltd. 120 812.25 576.88% Underpriced
ACI Limited (ACI 20%
Convertible Zero 3743 818.5 -78.13% Overpriced
56 Coupon
Bonds-RPO)
57 IFIC Bank 1st Mutual Fund 10 16.5 65.00% Underpriced
Phoenix Finance 1st Mutual
10 12.9 29.00% Underpriced
58 Fund
ICB AMCL 3rd NRB
10 12.7 27.00% Underpriced
59 Mutual Fund
RAK Ceramics (Bangladesh)
48 207.8 332.92% Underpriced
60 Limited
61 United Airways (BD) Limited 100 235.75 135.75% Underpriced
:
Page | 34
62 Malek Spinning Mills Limited 25 89.2 256.80% Underpriced
Beacon Pharmaceuticals
10 90.6 806.00% Underpriced
63 Limited
First Janata Bank Mutual
10 12.6 26.00% Underpriced
64 Fund
65 Green Delta Mutual Fund 10 11.4 14.00% Underpriced
Popular Life First Mutual
10 10.9 9.00% Underpriced
66 Fund
67 IFIL Islamic Mutual Fund-1 10 9.3 -7.00% Overpriced
Active Fine Chemicals
10 136.2 1262.00% Underpriced
68 Limited
69 PHP First Mutual Fund 10 9.7 -3.00% Overpriced
70 AIBL 1st Islamic Mutual Fund 10 9.4 -6.00% Overpriced

71 Deshbandhu Polymer Limited 10 74 640.00% Underpriced

Subordinated 25% Convertible
1,000 938.5 -6.15% Overpriced
72 Bonds of BRAC Bank Limited
73 MBL 1st Mutual Fund 10 10.9 9.00% Underpriced
74 Salvo Chemical Industry Limited 10 68.7 587.00% Underpriced
Barakatullah Electro Dynamics
60 72.8 21.33% Underpriced
75 Limited
Southeast Bank 1st Mutual
10 10.2 2.00% Underpriced
76 Fund
77 EBL NRB Mutual Fund 10 10 0.00% Similar
Priced
78 M.I. Cement Factory Limited 93 132.5 42.47% Underpriced
79 MJL Bangladesh Ltd. 115 145.2 26.26% Underpriced
Reliance One: The first scheme
of Reliance Insurance Mutual 10 12.7 27.00% Underpriced
80 Fund
LR Global Bangladesh
10 9.8 -2.00% Overpriced
81 Mutual Fund One
Rangpur Dairy & Food Products
18 37.8 110.00% Underpriced
82 Limited
83 Zahintex Industries Ltd. 25 45.4 81.60% Underpriced
84 AB Bank 1st Mutual Fund 10 10.1 1.00% Underpriced
85 NLI First Mutual Fund 10 27.6 176.00% Underpriced
First Bangladesh Fixed Income
10 10.1 1.00% Underpriced
86 Fund
GSP Finance Company
25 52.3 109.20% Underpriced
87 (Bangladesh) Limited
Padma Islami Life Insurance
10 163.1 1531.00% Underpriced
88 Limited
89 GPH Ispat Limited 30 72.9 143.00% Underpriced
90 NCCBL Mutual Fund-1 10 10.2 2.00% Underpriced
91 GBB Power Limited 40 43 7.50% Underpriced
Page | 35
 Bangladesh Submarine Cable
35 58.5 67.14% Underpriced
92 Company Limited
93 Saiham Cotton Mills Limited 20 19.9 -0.50% Overpriced
94 Unique Hotel & Resorts Limited 75 78 4.00% Underpriced
95 Aamra Technologies Limited 24 23.9 -0.42% Overpriced
Generation Next Fashions
10 43.5 335.00% Underpriced
96 Limited
97 Envoy Textiles Limited 30 61.9 106.33% Underpriced
Sunlife Insurance Company
10 82.1 721.00% Underpriced
98 Limited
Summit Purbanchol Power Co.
40 57.5 43.75% Underpriced
99 Limited
100 Argon Denims Limited 35 82 134.29% Underpriced
101 Premier Cement Mills Limited 22 103.5 370.45% Underpriced
Golden Harvest Agro Industries
25 76.4 205.60% Underpriced
102 Limited
103 Global Heavy Chemicals Limited 20 99.4 397.00% Underpriced
104 Orion Pharma Limited 60 75.2 25.33% Underpriced
Bengal Windsor
25 55 120.00% Underpriced
105 Thermoplastics Limited
ICB AMCL Sonali Bank Limited
10 10.1 1.00% Underpriced
106 1st
Mutual Fund
107 Familytex (BD) Limited 10 48.5 385.00% Underpriced
108 EXIM Bank 1st Mutual Fund 10 11 10.00% Underpriced
109 Central Pharmaceuticals Limited 10 38.4 284.00% Underpriced
Fareast Finance & Investment
10 19 90.00% Underpriced
110 Limited
Bangladesh Building Systems
10 47.2 372.00% Underpriced
111 Limited
112 Paramount Textile Limited 28 45.6 62.86% Underpriced
113 Appollo Ispat Complex Limited 22 38.1 73.18% Underpriced
Mozaffar Hossain Spinning
10 45.3 353.00% Underpriced
114 Mills Limited
115 AFC Agro Biotech Ltd 10 65 550.00% Underpriced
116 Emerald Oil Industries Limited 10 50 400.00% Underpriced
117 Matin Spinning Mills Ltd. 37 41.9 13.24% Underpriced
118 Hwa Well Textiles (BD) Limited 10 44.1 341.00% Underpriced
The Peninsula Chittagong
30 36.7 22.33% Underpriced
119 Limited
120 FAR Chemical Industries Ltd 10 52.6 426.00% Underpriced
121 Shahjibazar Power Co. Ltd 25 36.5 46.00% Underpriced
Khulna Printing & Packaging
10 37.1 271.00% Underpriced
122 Limited
Far East Knitting & Dyeing
27 45.4 68.15% Underpriced
123 Industries Limited
Page | 36
 Tung Hai Knitting & Dyeing
10 27.8 178.00% Underpriced
124 Limited
125 Shurwid Industries Limited 10 48.2 382.00% Underpriced
Ratanpur Steel Re-Rolling Mills
10 77.3 673.00% Underpriced
126 Limited
127 Saif Powertec Limited 30 71.4 138.00% Underpriced
Western Marine Shipyard
35 62.7 79.14% Underpriced
128 Limited
Khan Brothers PP Woven
10 76.6 666.00% Underpriced
129 Bag Industries Limited
130 Hamid Fabrics Limited 35 56.1 60.29% Underpriced
131 NATIONAL FEED MILL 10 42.5 325.00% Underpriced
LIMITED
132 C & A TEXTILES LIMITED 10 22 120.00% Underpriced
133 IFAD Autos Limited 30 67.7 125.67% Underpriced
134 Shasha Denims Limited 35 37.1 6.00% Underpriced
135 Zaheen Spinning Limited 10 24.3 143.00% Underpriced
Asian Tiger Sandhani Life Growth
10 7.4 -26.00% Overpriced
136 Fund
United Power Generation &
72 134.6 86.94% Underpriced
137 Distribution Company Limited
Bangladesh Steel Re-Rolling Mills
35 78 122.86% Underpriced
138 Limited
139 Tosrifa Industries Limited 10 35.7 257.00% Underpriced
140 Olympic Accessories Limited 10 48.4 384.00% Underpriced

Page | 37