Delta Hospital’s cut-off price to be set on April 5

The cut-off price of the shares of Delta Hospital Ltd, in an ongoing initial public offering (IPO), remains unpublished although bidding closed at 5pm on Wednesday.

The eligible institutional investors will know the company's cut-off price on April 5, 2020.

Eligible investors will be able to submit their valuation reports through an electronic subscription system (ESS) between April 5 to 7.

The schedule has been changed due to the declaration of government holidays.

The bidding for Delta Hospital Ltd started at 5:00pm on March 22 at the Dhaka Stock Exchange in the capital.  

Issue manager sources told The Business Standard, "Due to government holidays, the bidding process will not be possible to complete by this time." 

"As a result, the eligible institutional investors will know the cut-off price of the company's share after the vacation, on April 5," he added. 

The company is engaged in general medical treatment plus in cancer diagnosis, treatment and management in Bangladesh's private sector. 

In the electronic bidding process, the company is expected to collect Tk50 crore in capital. 

Delta Hospital claims that it will spend the funds on repaying debts and buying cancer treatment equipment. 

At present, the paid-up capital of the company is Tk33.21 crore.

The company's last financial year report shows that it gets 28 percent of its total revenue from the sale of medicine and vaccines, 17 percent from pathology, 15 percent from LINAC therapy, and 12 percent from seat rent. 

The company also earns revenue from other sources such as: diagnostics, service charges, chemotherapy, and doctors' fees.

In the last four financial years, the company has seen gradual growth in terms of revenue. Its annual revenue growth was 11 percent. 

In the 2018-19 financial year, it had revenue of Tk65.33 crore. 

As of December 31, 2019, the company had a long-term loan worth Tk85.45 crore from NCC Bank. Shareholders' equity is Tk155.68 crore. 

In the first half of the current financial year, the company's revenue increased by seven percent to reach Tk34.16 crore. The net profit has also gone up by five percent to reach Tk3.39 crore. 

Prime Finance Capital Management Ltd is the issue manager for the company while ICB Capital Management Ltd is the registrar to the issue.  

The company started off in 1989 as Delta Medical Centre. In 2007, the company changed its name to 'Delta Hospital Ltd.'

The hospital has two units, one in Mirpur and another in Uttara, Dhaka.  

Initially, the company started with 100 beds, and this gradually increased to 250 beds in 1994, and then to 400 beds. 

The company plans to increase its bed capacity to 500, and it received a license to do so on January 21, 2016 from the Directorate General of Health Services.  

The proposed project envisages setting-up a modern specialised hospital with a capacity of 150 beds. The initial cost of the proposed hospital project has been estimated at Tk185.22 crore.