Stocks
S. Alam has 13 times higher debt rate than paid-up capital
Dhaka Stock Exchange, (DSE) S. Alam Cold Rolled Steels Limited listed in the stock market has debt ratio is much higher than the paid-up capital. A review of the company’s report showed that the debt was about 13 times higher than the paid-up capital. Added, the company’s assets against debt are one-seventh. Meanwhile, the interest amount is more than 7 times compared to the annual income of the company. The matter came up after analyzing the information given to DSE and the financial report of the company for 2021.
According to sources, the paid-up capital of this company, which was listed in the Bangladesh Stock Market in 2006, is Tk 98 crore 37 lakh. According to the current share price, the market value of the company is Tk 327 crore 57 lakh. But the company has taken loans of more than Tk 1 thousand 300 crore from many banks.
S. Alam Cold Rolled Steels Limited has received short-term loans of Tk 1,347 crore and 87 lakhs from various banks. Even if calculated at the rate of 8 percent, the company will have to pay Tk 59 crore 11 lakh in one year only for interest. But according to the financial report of the company for the year 2021, the company made an after-tax income of Tk 8 crore 23 lakh 15 thousand in one year. A question has also been raised about how to pay the interest of Tk 59 crore with an income of Tk 8 crore a year. Stock market people say that if the company’s income does not match the bank loan, there is a possibility of the company going bankrupt. This also increases the risk of casual investors being harmed.
It is reported that the inventory of S. Alam Cold Rolled Steels has also been dropping continuously for the last 4 years. In 2019, the asset value per share of the company was 19 taka 46 paisa. And the value of total assets was 191 crore 43 lakh 1 thousand 606 taka. On the other hand, according to the latest financial report of the company, the asset value per share of the company as on June 30, 2022 was Tk 18.56 paisa. As such, the asset value of the company in 2022 stood at 182 crore 57 lakh 67 thousand 616 taka.
When asked, the company secretary of S. Alam Cold Rolled Mills Limited. Sohail Amin told Orthosongbad, S. Alam Cold Rolled Public Company, all details are given, please check. Also, when asked whether a company with a paid-up capital of less than 100 crore takas can get a loan of 1,300 crore taka, while he refused to answer the question.
Al Amin, associate professor and share market analyst of Dhaka University’s accounting and information department, asked whether a company can get 13 times more debt than its paid-up capital. He told Orthosongbad that banks give loans to companies considering the equity-debt ratio. Banks review whether the company has the assets to give such a large amount.
In response to the question whether there is a risk in investment if the amount of debt is more than the paid capital, he said that many ordinary investors invest with the advice of others. But no one forces them to buy any shares. They often invest without looking at a company’s credit rating, risk etc. Therefore, investment decisions can be correct if the risk is taken into account.
Incidentally, S. Alam Cold Rolled Steel Mills Limited was listed in the stock market in 2006. General investors are holding 17.43 percent shares of the company. Institutional investors hold 29.50 percent shares. The remaining 53.07 percent shares are owned by its entrepreneurs-directors.
Dhaka Stock Exchange DSE, Bourse on the third working day of the week, November 28, ended with price Index & turnover drops. This information is known from DSE sources.
297 crore 20 lakh shares were traded on this day. 179 crore 14 lakh less trading was done in DSE today compared to the previous workday, 27 November, Shares worth Tk 369 crores 96 lakh shares were traded last time, Monday. From the DSE website, the lowest trade was done on 17 August, which was around 299 crore taka, which means after 70 working days the stock market hit its lowest today.
The benchmark DSEX lost 6.62 points or 6,202 The Shariah-based index DSES dropped 0.72 points or 1,346, and the blue-chip index DS30 decreased by 1.98 points or 2,099.
Of the issues traded, 17 advanced, 134 declined and 139 remained unchanged.
Ambee Pharmaceuticals PLC ranked top gainer on DSE, the share price increased by Tk 53.60 paisa or 6.83 percent. On this day, the share was last traded at Tk 838.40 paisa.
Bd. Thai Aluminium Limited ranked top loser on the DSE, the share price dropped by Tk 1.40 paisa or 7.73 percent. On this day, the share was last traded at Tk 16.70 paisa.
DSE topped on trade is Central Pharmaceuticals Limited 15 crore 96 lakh takas of shares of the company have been traded.
A total of 52 companies’ shares were traded in the Block on the Dhaka Stock Exchange, 60 lakh 14 thousand 277 shares of the companies were traded. The financial value of which is 29 crore 84 lakh taka.
One of the Listed companies, Ring Shine Textiles Limited has recommended no Dividend for the year ended June 30, 2023.
In terms of financial performance, The Company has further informed EPS loss of Tk. 2.53 for the year ended June 30, 2023. The Company has also reported NAV per share loss of Tk. 4.97 paisa.
The Annual General Meeting (AGM) of the company will be taking place on January 20, through the digital platform. The record date for this has been fixed at December 17.
One of the listed companies, Bd. Thai Aluminium Limited discloses its financial reports for the first quarter, (July-September 23).
The company’s diluted earnings per share (EPS) loss of Tk 0.19 paisa in Q1 of the current financial year (July-September 23). EPS loss of Tk 0.12 paisa during the same period last year. NAV per share was of Tk. 27.66 paisa as of September 30, 2023.
