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SANDHANI LIFE FINANCE LIMITED
Bangladesh Steel Re‐Rolling Mills Limited
IPO DETAILS Face Value per share Tk. 10.00
Premium Tk. 25.00 Offer Price per share Tk. 35.00 Market Lot (Shares) 200
Security Trading Code BSRMLTD Authorized Capital Tk. 5,000,000,000
Pre-IPO paid-up Capital Tk. 1,558,510,380
IPO size in shares 17,500,000
IPO size in Tk. at face value
Tk. 175,000,000
IPO size in Tk. at offer price
Tk. 612,500,000
Post IPO Paid-up Capital Tk. 1,733,510,380
Subscription Open February 01, 2015
Subscription Close February 05, 2015
NAV per share Tk.52.09(including revaluation reserve)andTk.25.58(excludingrevaluation
reserve)as at December 31, 2013 EPS Tk. 5.06 for the year ended on December
31, 2013 Issue Manager(s) Alliance Financial Services Limited
Auditors Rahman Rahman Haq
Website www.bsrm.com
Company Profile
Bangladesh Steel Re-Rolling Mills Limited is the first fully automatic re-rolling mills built in the country. It was established in 1952 as a small manually operated rolling mill by four businessmen, Mr. Akberali Alibhai Africawala, Mr. Taherali Africawala, Mr. Abdul Hussain Africawala and Mr. Rajabali Africawala. Later in 1960 it was reconstructed under the Companies Act 1913 as “East Bengal Steel Re-Rolling Mills Limited”. After our liberation the company was renamed as “Bangladesh Steel Re-Rolling Mills Limited”, and become the flagship company of BSRM Group. In 1984, the old plant was dismantled and commissioned with fully automatic machinery from UK with enhanced annual production capacity of 60,000 MT. In 2004 another BMRE (Balancing, Modernization, Rehabilitation & Expansion) was made and the production capacity increased to 120,000 MT introducing high quality 60-grade re-enforcing steel to facilitate heavy construction in Bangladesh. In 2011, Bangladesh Steel Re-Rolling Mills Limited amalgamated with “Meghna Engineering Works Limited (MEW)” another concern of BSRM Group engaged in billet making. Since the amalgamation, the two companies carries out its business as a single legal entity and operates as two separate units (Bangladesh Steel Re-Rolling Mills Limited as “Re-rolling mills” and Meghna Engineering Works Limited as “Steel Melting Works”) for administrative purpose only. In the Steel Melting Works unit, MS Billet is produced from scraps and sponge iron and then by rolling this MS billet the Re-rolling Mills unit produces 60 grade and 40 grade MS bars , angles, channels, I-beam, great-beam etc.
Name of Associates, Subsidiary/Related Holding Company and their Core Areas of Business:
Name of Company
Core area of Business Established in Remarks % of Share
BSRM Steels Limited
MS Rod Manufacturer 20 July 2002 Associate 31.19%
BSRM Steel Mills Limited
Proposed Manufacturer of M.S. Billets
16 April 2008 Associate 21.76%
A brief on Sister concerns of the group at a glance:
BSRM Steels Ltd: BSRM Steels Limited has been listed with both Dhaka & Chittagong Stock Exchanges in 2009. The plant is fully automated 600,000 TPA re-rolling mill supplied by Danieli of Italy and located at Fouzderhat Industrial Area, Chittagong. It produces latest generation “Xtreme 500W” grade 500 re-bars. BSRM Iron & Steel Co. Ltd: (BISCO) BISCO, the subsidiary of BSRM Steels Limited, produces high-grade MS Billet for BSRM Steels Ltd. The project is in operation since June 2010 and now operating at around 90% capacity. H. Akberali & Co. Ltd: Owners of land property and commercial buildings at Dhaka and Chittagong (Agrabad & Sadarghat). BSRM Wires Ltd: Running a wire drawing plant at Karnafully Engineering Works Ltd. premises in Nasirabad, Chittagong. Karnafully Engineering Works Ltd: Owners of a 3.26 acre scrap processing yard and covered buildings for storage in Nasirabad Industrial Area, Chittagong and wire manufacturing unit of BSRM Wires Limited. BSRM Recycling Industries Ltd: Owners of a scrap processing unit in Nasirabad, Chittagong, with imported shears and cranes. Bangladesh Steels Ltd: Being used as storage for slags and machineries situated at Nasirabad along with 2.65 acre plot at Faujderhat Industrial Area to stock billets of BSRMS BSRM Steel Mills Limited: This is a proposed project for the production of 862,000 MT MS Billet per year. Land acquisition for the project has already completed and other installations are continuing in full swing. The project is expected to go into commercial operation from January 2015. Chittagong Power Company Ltd. (CPCL): This is a proposed coal-fired power plant for generation of 150 MW power primarily to meet the consumption of BSRM Group concerns. It has already received permission from the Govt. and expected to start power generation within next 3 years. BSRM Logistics Limited: The proposed jetty will be built in Bhatiary. Permission from the Govt. has already been received. Furthermore, the company owns and operate a fleet of 55 trucks lorries to carry own materials to customer site.
Utilization of fund
On Going Expansion BMRE
Million Tk.
Implementation schedule
A. Payment of Retention Money (For Machinery)
36.00 Apr-15
184.20 Sep-15
Total 220.20
B. Finished Goods Storage Shed
167.31 Within December 2015 after getting IPO fund
C. Loan repayment 204.00 Immediate the IPO fund is available
IPO Expenses (approx) 20.99 Time to time , As and when required
Total IPO proceeds 612.50
Credit Rating Status
Long Term Short Term
Entity Rating AA- ST-2
Date of Validity
20 May, 2015 20 November, 2014
Rating Assigned By
Credit Rating Information and Services Ltd. (CRISL)
Financial Information (BDT in MN)
2011 2012 2013 Total Equity 4,404.88 7,526.32 8,118.75 Total Assets 14,854.80 16,840.38 21,144.14 Revenue 12,664.40 14,043.42 8,602.42 Net Profit 1,150.80 453.92 788.70 EPS 7.38 2.91 5.06
SANDHANI LIFE FINANCE LIMITED
FINANCIAL RATIOS
Particulars 2010 2011 2012 2013
Liquidity Ratios:
Current Ratio 0.66 0.95 1.06 0.99
Quick Ratio 0.37 0.41 0.40 0.43
Cash Ratio 0.02 0.01 0.01 0.01
Operating Cash Flow Ratio -0.16 0.23 0.07 0.01
Operating Efficiency Ratios:
Average Collection Period (Days) 16.86 12.97 12.82 20.11
Inventory Conversion Period(Days) 60.42 88.94 223.20 114.96
Payables Payment Period (Days) 33.50 41.23 120.43 68.46
Operating Cycle (Days) 77.28 101.91 236.02 135.07
Cash Conversion Cycle (Days) 43.79 60.68 115.58 66.62
Operating Profitability Ratios:
Gross Profit Margin (GPM) 6.00% 8.50% 4.97% 5.81%
Operating Profit Margin (OPM) 5.10% 6.84% 3.46% 3.31%
Net Profit Margin (NPM) 3.42% 9.09% 3.23% 9.17%
Return on Total Assets (ROA) 3.41% 7.75% 2.70% 3.73%
Return on Equity (ROE) 10.78% 26.13% 6.03% 9.71%
Leverage Ratios:
Total Debt to Equity 2.16 2.37 1.24 1.60
Times Interest Earned (TIE) 2.49 2.20 1.01 1.81
Debt to Total Assets 0.68 0.70 0.55 0.62
Growth Rates:
Sales Growth Rate 26% 66% 11% -39%
EBIT Growth Rate 27% 122% -44% -41%
Net Income Growth Rate 212% 341% -61% 74%
Total Asset Growth Rate 31% 94% 13% 26%
Listed Peer Companies BSRMSTEEL GPHISPAT RSRMSTEEL BSRMLTD
Paid up in mn 3417.75 1247.40 655.20 1733.51
Listing year 2009 2012 2014 IPO
Year End Dec April June Dec
ROE (latest) 19% 14% 9% 10%
Mk F P/E * 20.28 17.86 9.96 NM
Mk Price* *(as on 29-01-
15)
78.7 45 54.2 35 (offer Price)
Research Team Syed Abu Redowan Research Analyst [email protected]
Shubho Barua Chowdhury Research Associate [email protected]
Disclaimer
This material is produced by Sandhani Life Finance Ltd., a Merchant Banker registered with Registrar of Joint Stock Companies and Firms, Bangladesh. This document is not to be used or considered as an offer to sell or a solicitation of an offer to buy any securities, or to enter into any other agreement. Projections of potential risk or return are illustrative, and should not be taken as limitations of the maximum possible loss or gain. Past performance is not indicative of future results. The information and any views expressed in this document are given as at the date of writing and subject to change. While the information has been obtained from sources believed to be reliable, Sandhani Life Finance Ltd. do not represent that it is accurate or complete and it should not be relied on as such. Sandhani Life Finance Ltd. and its employees accept no liability for any direct or consequential loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document is not to be relied upon or used in substitution for the exercise of independent judgment. It is being furnished to you solely for your information, and by accepting this report you agree to be bound by the foregoing limitations.
83.66
261.19
1,150.80
453.92
788.70
2009 2010 2011 2012 2013
Taka in mn
Net profit after tax
