Nurani Dyeing in crisis, factory shut down!

After three years of being listed in the Dhaka Stock Exchange (DSE), Nurani Dyeing & Sweater Ltd (NDSL) – a 100% export-oriented company dyeing yarn, knitting of various types of sweater manufacturer – has fallen into financial crisis following losses incurred due to the Covid-19 pandemic.

Meanwhile, a DSE team has recently visited the factory premises and head office but found both the premises closed and the team could not enter there, as per the DSE website.

However, the company has not published any price sensitive information (PSI) for the shareholders although both its factory and head office were closed.

Seeking anonymity, a DSE official said every information, which reflects the company's financials, has to be published as PSI but the company did not do that. The bourse will take necessary action against it.

Following the information, NDSL's share price rose by 9.8% to Tk11.2 on Monday from Tk10.2 on Thursday.

Last year, the company turned into a loan defaulter. At that time, a bank sent a legal notice asking to repay the loan as early as possible.

In its financial report for 2016-17, NDSL mentioned that it had defaulted on Tk16 crore in a short-term loan from AB bank.

According to its latest financials, its term loan amounted to Tk56.86 crore up to FY20, which was Tk39.77 crore in the previous year.

Also, it has a Tk8.15 crore short-term loan from Agrani Bank Ltd.

There was an allegation that the company got initial public offerings (IPO) approval from the securities regulator despite its weak financial state.

In 2017, the company raised Tk43 capital through IPO for business expansion from the stock market.

TBS failed to reach the company officials through phone numbers provided on its website.

LOSSES DUE TO COVID-19

DSE's yearly revenue used to be more than Tk100 crore between 2017 and 2019 but its revenue declined to below Tk100 crore due to the adverse impact of the Covid-19 pandemic in FY20.

Besides, the company did not maintain impressive growth in production, export and profitability following an increase in the cost of fuel, gas and raw materials, said its FY20 audited financial statement.

According to the statements, in FY20, its revenue decreased by 31% to Tk81.65 crore from Tk118.66 in the previous year. It incurred a loss of Tk4.6 crore and Tk0.41 per share in that year.

In the previous year, it made a profit of Tk12 crore and the price of its earnings per share was Tk1.18. The sluggishness continued till 2020-21.

In the first nine months of that year, it incurred a loss of Tk3.43 crore while loss per share stood at Tk0.28.

Its factory started commercial operation on 5 February 2009. It has closed its Dhaka office and shifted to Feni.

It offered 2% cash dividends to its shareholders in 2018. In FY19, it paid a 10% stock dividend and in FY20, it recommended a 10% stock dividend.

Till February 2021, of the total share of the company, 51.79% are owned by general investors, sponsors, 30.93% by directors and 17.28% by institutional investors.