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 Market DSE, Bourse on the second working day of the week, 30th September, ended with a negative performance in Indices and a hike in Turnover from the previous working session. This information is known from DSE sources.
503 crore 90 lakh taka shares were traded on this day. 22 crore 58 lakh more tradings were done in DSE today compared to the previous workday, 29th September, Shares worth Tk 481 crores 31 lakh shares were traded last time, Sunday.
The benchmark DSEX lost 33.61 points or 5,624 The Shariah-based index DSES dropped 7.36 point or 1,263 and the blue-chip index DS30 decreased by 9.57 points or 2,053.
Of the issues traded, 72 advanced, 299 declined and 25 remained unchanged.
Shahjibazar Power Company Limited ranked top gainer on DSE, the share price increased by Tk 4.00 paisa or 9.76 percent. On this day, the share was last traded at Tk 45.00 paisa.
Dhaka Electric Supply Company Limited ranked top loser on the DSE, the share price dropped by Tk 1.80 paisa or 7.56 percent. On this day, the share was last traded at Tk 22.00 paisa.
DSE topped on trade is Pragati Life Insurance Limited 25 crore 35 lakh takas of company shares have been traded.
A total of 27 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 50 lakh 42 thousand 956 shares of the companies were traded. The financial value of which is 65 crore 60 lakh taka
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
