Sinobangla shares jump 30% on rights issue decision
The share price of Sinobangla Industries Limited soared 30% a day after the plastic packaging manufacturer decided to issue right shares to raise funds for business expansion and loan repayments.
On Wednesday evening, the board of the company decided to issue the right shares and pay dividends to its shareholders.
Right shares are new shares that are issued by a company only for its existing shareholders.
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And according to the rules of getting listed on the Dhaka Stock Exchange (DSE), there is no circuit breaker on share price changes on the day after the dividend announcement.
After that, the daily share price movement limit of 10% remains in effect, the rules added.
Sinobangla's share price rose 29.90% or Tk18 to end at Tk78.20 on the country's premier bourse on Thursday when 49.15 lakh shares of the company were traded.
According to a stock exchange disclosure, the company's board has decided to issue one right share against two existing shares to its shareholders.
The issue price of the right share has been set at Tk20 including the Tk10 premium.
Sinobangla Industries Limited will raise around Tk20 crore by issuing the right shares subject to the approval of shareholders and the securities regulator.
Besides, the company has recommended 10% cash and 1% stock dividend to its shareholders for fiscal 2021-22.
Sinobangla will hold its annual general meeting on 18 January 2023 to get the right shares and dividends approved. To this end, it has set 28 November as the record date.
In the last financial year, the company's earnings per share (EPS) stood at Tk1.81, which is 1% higher than the previous year.
At the end of 30 June 2022, its net asset value per share was Tk27.87.
Sinobangla's factory has two units – both manufacture plastic bags but one for the local market and the other for exports.
