investment banking operation
TRANSCRIPT
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Abridged Version of Prospectus
Tulsi Pharmaceuticals Limited
House No. 48A, Road No. 11A Dhanmondi R/A, Dhaka 1209 Dhaka, Bangladesh
Phone: +880-2-9132594, 8120243 Fax: +880-2-9120657
E mail:[email protected]
Website: www.tulsipharma.com
Public offer of 40,000,000ordinary shares of Tk. 100/- per share totaling to Tk. 4,000,000,000/-
Subscription
For General public Opening Date: May 08, 2011 closing Date: May 15, 2011
For NRB applicants Opening Date: May 08, 2011 closing Date: June 02, 2011
Credit Rating Agency
Credit Rating Agency of Bangladesh (CRAB)
Long Term
Entity Rating A1
Date of Rating 09 December 2009
Manager(s) to the Issue
Equity Partners Limited
1003, Dhaka Stock Exchange
Annex Building (9th Floor)
9/E, Motijheel C/A, Dhaka 1000
IDLC Finance Limited
Bays Galleria (1st Floor)
57, Gulshan Avenue,
Gulshan 1, Dhaka 1212
UnderwritersIDLC Finance Limited
Lanka Bangla Finance LimitedJanata Bank LimitedIIDFC Capital Limited
ICB Capital Management Limited
Issue Date of Prospectus: 05.04.2011The Issue shall be placed in "N" Category
mailto:[email protected]:[email protected]://www.tulsipharma.com/mailto:[email protected]://www.tulsipharma.com/ -
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"CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESESECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGECOMMISSION (PUBLIC ISSUE) RULES, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENTTHE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUERCOMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OFTHE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE
ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, UNDERWRITERAND/OR AUDITOR".
Special Note
Please read the Prospectus carefully which includes Risk Factors before taking your investment
decision.
An applicant cannot submit more than two applications, one in his/her own name and another
jointly with another person. In case an applicant makes more than two applications, all
applications will be treated as invalid and will not be considered for allotment purpose. In
addition, whole or part of application money may be forfeited by the Commission.
Company Profile
Tulsi Pharmaceuticals Ltd. (TPL) is one of the fastest growing pharmaceutical finished formulation
manufacturing companies in Bangladesh with a mission to provide innovative high quality range of
healthcare products. TPL has been striving for more than 18 years and has devoted entirely to the
development of excellent pharmaceutical finished products. Relentlessly pursuing scientificknowledge, building the strength and developing the vision required to compete with the best in the
future TPL has grown into a company that boosts of world class products, excellent productionfacilities and quality professionals. TPL has crossed numerous milestones in its journey.
Turnover has grown multifold;
Introduced several new life saving molecules for the first time in Bangladesh;
Possesses an excellent production infrastructure; and
It has created effective systems and built committed teams of professionals, which ensure that
General Pharma is fully prepared and ready to successfully take on the challenges of the future. General
Pharmaceuticals has about 248 dosage forms for marketing within Bangladesh.
There are 2000 skilled professional are working in TPL inclusive of 900 Sales & Marketing Force.
The distribution network is spread all over Bangladesh with a professional team of 500 distributionspersonnel. Launching new products in every month, maintaining the strong position in the market
since their inception in 1987.In recent years TPL has entered into export fields by registering its
products in Viet Nam, Kenya, Hong Kong, Macau, Mauritius, Myanmar, Sri Lanka & Maldives. In
this connection TPL is also aiming to export their pharmaceutical finished products to other countriesof South East Asia, Middle East and Africa and Latin America
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History of the Organization
Tulsi Pharmaceuticals Ltd. (TPL) is incorporated as Private Limited Company on the 5th day of April,
1984. Dr. Momenul Haq, Managing Director, Dr. Gazi Nurun Nabi, demised Director were friendsand classmates since their boyhood. While they were medical students, countrys poor health condition
struck their mind. They would always feel that health sector was being deprived and neglected. They
cherished in their mind to do something for welfare of the common people by rendering their
professional zeal. With this end in view M/S. Tulsi Pharmaceuticals Ltd. (TPL) stepped into
manufacturing of drugs during, 1987 with initial 7 products and minimum manpower.
Vision
General envisions a leading role for itself as a catalyst for improvement of the healthcare environment.
Mission Statement:
The company's mission is to maintain people's health and combat disease to enhance the quality of
human life so that people may live longer, healthier and more meaningful lives.
Product Line:
General offers a wide variety product to combat against different diseases. Therapeutic wise product
category of General Pharma are given below-
DRUG ACTING ON GIT CARDIOVASCULAR DRUGS
VITAMIN & MINERALS PSYCHOTROPIC
ANTIHISTAMINE & ANTIASTHMATIC ANTIMICROBIAL/ANTIPROTOZOLE
NEUROTONICS ANTI-OBESITY
MUSCULOSKELETAL DRUGS DERMATOLOGICAL
ANTIDIABETIC ANTI CANCER
ANTI MIGRAINE UROLOGICAL DRUG
ENERGY PRODUCER ORS
INJECTABLE ANTISEPTIC MOUTHWASH
DISINFECTANT ANTI-GOUT
ANTI-ANGINAL & ANTI-ISCHEMIC
DRUGS
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Issue size and purpose of public offering
Financial Structure of the Company
The Financial Structure of the Company as follows:
Particulars No. of shares Face Value(Taka) Amount in Taka
Before IPO
Authorized Capital ordinary shares
of Tk. 100 each
20,000,000
0
100.00 200,000,00000.00
Total Paid-up before IPO 60,000,000 100.00 6,000,000,000.00
After IPO
To be issued as IPO 4,000,0000 100.00 4,000,000,000.00
Total no of shares (post IPO) 100,000,00
0
Paid up capital (post IPO) 100,0000,0000.00
Investor Quota Percentage Amount
Eligible Institutional Investors 30% 1,200,000,000.00
Mutual Fund Portion 10% 400,000,000.00
NRB portion 10% 400,000,000.00
Public Portion 50% 2,000,000,000.00
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Use of IPO proceeds:
Subsequently, considering the business requirements, the management decided to utilize the fund in the
following:
Particulars Amount (Tk.)
Repayment of loan to HSBC
Repayment of loan to Agrani Bank Ltd.
Construction of new factory
Machinery import for production
Office equipment
Office decoration
Raw materials
Research and development cost
20,5500000
10,4000000
125,107,0000
145,00,00000
84,00,000
64,00,000
158,270,000
764,340,000
Total 3,947,980,000
Use of IPO Proceeds Amount(Tk.)
IPO Proceeds 4,00,000,0000
Less: IPO expenses (approx.) 52,020,000
Net IPO Proceeds 4,052,020,000
Working Capital Requirement 3,947,980,000
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Breakdown of IPO expenses
Particulars Rate Amount in Tk.
Manager to the Issue
Fees
@ .50% on entire offer 20,000,000
Regulatory Expenses
Listing related
expenses:
Service Charge Fixed 5,000
Annual Fee for DSE &
CSE
Fixed 2,00,000
Listing Fees for Stock
Exchange (DSE &
CSE)
@ .25% on up to tk.10
crore of paid up capital
& 0.15% on the
balance amount (Max20 lac)
4,000,000
SEC Fees
Application Fee Fixed 10,000
Consent Fee @ .15% on entire offer 6,000,000
IPO Commission
Underwriting
Commission
@ .25% on entire offer 10,000,000
Bankers to the Issue
Commission
@ .1% on entire offer 4,000,000
Printing & Post IPO Expenses (Estimated):
Abridged version of
Prospectus and
Noticed
Estimated 10,00,000
Printing of Prospectus
and Forms
Estimated 16,00,000
Post issue Expenses Estimated 40,00,000
Arrangement of
Lottery
Estimated 12,05,000
Total
52,020,000
Ratio Analysis:
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ParticularsFor the year ended
30 June
2010
30 June
2009
30 June
2008
30 June
2007
30 June
2006
Liquidity Ratios
Current ratio 0.7436484 0.9835916 0.228470235 0.09853002 0.611970053
Quick (Acid
Test) ratio
0.7754867 1.0579843 0.247620758 0.09853002 0.611970053
Times interest
earned ratio
8.586705412 6.095730411 2.591541806 N/A N/A
Debt to equity
ratio
0.7428178 2.8518497 3.062439306 1.746816813 0.085804175
Operating Ratio
Accounts
receivable
turnover ratio
33.47111518 16.40332377 5.098427572 N/A N/A
Inventory
turnover ratio
0.136356243 0.350931171 0.136356243 N/A N/A
Asset turnover
ratio
0.144483279 0.15020331 0.014180369 N/A N/A
Profitability Ratios
Gross profitmargin
0.826552907 0.76486992 0.748107869 N/A N/A
Operating profitmargin
0.73960492 0.666218462 0.299874065 N/A N/A
Net profit
margin
0.392082717 0.334155494 0.110496878 N/A N/A
Return onAssets (ROA)
0.056649397 0.050191261 0.001566887 N/A N/A
Return onEquity (ROE)
0.114214905 0.220465998 0.007447044 N/A N/A
Earnings
Per Share
(Taka)
6.21325735 2.8281768 0.075029183 N/A N/A
Risk Factors
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The Company is operating in an industry involving both external and internal risk factors having direct
as well as indirect effects on the investments by the investors. The assessable risk factors, both externaland internal, are mentioned below-
(a) Interest Rate Risk
Interest/financial charges are paid against any kind of borrowed fund. Instability in money market and
increased requirement for fund may put pressure on interest rate structure. Rising of interest rateincreases the cost of fund and consequently there may be impact on profitability.
(b) Exchange Rate Risk
The Company imports raw materials against payment of foreign currency. Unfavorable volatility or
currency fluctuation may affect the profitability of the Company.
(c) Industry Risk
Environmentalists are likely to create pressure on Government to protect or banning those factory,
which are not follow proper ETP, Waste management solution, Air pollution etc. which are negative
effects on living being and environment thereby causing closure of business by the Company.
(d) Market and technology related Risk
The company has world-class infrastructure with most sophisticated machinery and equipments. Fullysegregated independent production facility equipped with sophisticated high-tech European machinery.
Integrated Building Management System (IBMS) supported by latest dynamic software networking to
ensure central monitoring and complete automatic operation of the plant. Independent modern QA, QC,
Microbiological and Product Development Laboratories supported with high-tech equipment to ensurethe highest quality of products. Electronically controlled operation system as per guideline of GAMP -
4 (Good Automated Manufacturing Practice).The production facilities are based on currently available
technology. Any invention of new and more cost effective technology may cause operationalobsolescence thereby causing in substantial new investments. Proposed new investments in diversified
product lines may need diversified technology and management skills, which may not be available.
Any serious defects in the plant and machinery may affect production and profitability calling foradditional investment for replacement.
(e) Potential or existing government regulations
Any adverse change by the Government in fiscal policies relating incentives, rebate etc. may adversely
affect Company's profitability as well as adverse effect the production of life saving drugs.
(f) Potential changes in global or national policies
The Company's product lines consist of specialized and sophisticated anti-cancer, cardiovascular,antibiotic and other life saving drugs products that are primarily based on imported raw materials. Any
shortage in the international market might dent the production level and profitability. Law and order
situation and political unrest may also jeopardize Company's operations and adversely affect
profitability.
(g) Operational risk
Shortage of power supply, labor unrest, unavailability or price increase of raw materials, natural
calamities like flood, cyclone, earthquake etc. may disrupt the production of the Company and canadversely impact the profitability of the Company.
Credit Rating:
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Credit Rating Agency of Bangladesh Limited (CRAB) has assigned A1 (pronounced Single A One)
rating in the Long Term to General Pharmaceuticals Limited (hereinafter referred to as TPL, or theCompany). Companies rated in this category have very strong capacity to meet their financial
commitments. These companies are judged to be of very high quality, subject to very low credit risk.
Rights of the Shareholder:
Dividend: All the shareholders have equal but proportionate right in respect of dividend. Dividend
will be paid in Bangladeshi Taka only. Transfer of shares: Shares are transferable. The transfer will be made by the CDBL under
electronic settlement process.
Voting Right: All the shareholders shall have usual voting rights. Voting right can be exercised in
person or by proxy in a meeting.
Encashment: The shares will be listed with DSE. So investment in this Fund will easily be
encashable.
Receive Annual Report:The shareholders shall have the right to receive all periodical reports and
statements audited as well as unaudited published by the company from time to time.
Conversion:The Company is issuing ordinary shares through this prospectus with the consent of
the SEC. Company in its General Meeting may convert any fully paid up shares into stock and reconverts
such stock into paid up shares of any denomination if it is so determined by the company.
Accounting Year:
Financial period of the company covers one year from 1st July to 30th June consistently.
Audit Fee:
The audit fee will be Tk. 2, 00,000.00 (two lac) only for the first year and it will fix up for subsequent
years.
Dividend policy:
a) Subject to the rights of members entitled to shares if any with preferential or special rights attached
thereto as to dividends and subject to the provisions of these presents as to the reserve fund and
depreciation fund the net profits of the Company in respect of any year or other period shall be appliedin the payment of dividend on the ordinary shares of the Company but so that a partly paid up share
only entitles the holder with respect thereto to such proportion of the Distribution upon a fully paid up
share as the amount paid thereon bears to the nominal amount of each share.
b) The Company in general meeting may declare a dividend to be paid to the members according to
their rights and interests in the profits and may fit the time for payment.
c) The declaration of the Directors as to the amount of net profits of the Company shall be conclusive.
d) There is no limitation on the payment of dividend to the shareholders.
Tulsi Pharmaceuticals Limited
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Balance Sheet
Particulars
For the year Ended
June 2006 June 2007 June 2008 June 2009 June 2010
Taka Taka Taka Taka Taka
Assets
Non-
Current
Assets
Property,
Plant &
Equipment
680,242,6
96
1,827,645,8
76
2,797,103,2
42
3,006,464,1
09
5,969,019,40
2
Less:
Accumulated
depreciation
- - 19,381,563 34,903,293 51,770,227
Total long
term assets
680,242,6
96
1,827,645,8
76
2,777,721,6
79
2,971,560,8
16
5,917,249,17
5
Current
assets
Inventories - 3,205,310 75,261,182 340,247,894 614,390,734
Loans,
advance &
deposits
45,108,26
4
9,590,889 9,659,561 8,430,959 12,929,280
Cash & bank
balances
250,028 6,836,989 2,421,572 29,681,552 7,772,633
Accounts
receivables- - 7,990,891 30,958,317 28,406,826
Total current
assets
45,358,29
2
19,633,188 95,333,206 409,318,722 663,499,473
Less:Current
liabilitiesand
provisions
Short term
Borrowings
72,351,78
3
184,743,846 406,452,245 391,582,929 867,076,684
Accounts
payables
639,507 9,771,340 4,412,181 15,686,708 14,933,529
Accrued
expenses
1,031,796 4,665,790 5,919,730 8,233,972 9,652,670
Tax
payables
95,397 80,000 483,354 643,419 559,099
Total current
Liabilities
74,118,48 199,260,976 417,267,510 416,147,028 892,221,982
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andprovisions
3
NetworkingCapital
(28,760,19
1)
(179,627,78
8)
(321,934,30
4)
(6,828,306) (228,722,50
9)
Net assets 651,482,5
05
1,648,018,0
88
2,455,787,3
75
2,964,732,5
10
5,,688,526,6
66
Financed by
Long term
borrowings
51,482,50
5
1,048,018,0
88
1,851,249,9
23
3,323,189,4
73
2,424,148,92
1
liability for
EWF- - 35,701 552,429 395,320
Total long
term
liabilities
51,482,50
5
1,048,018,0
88
1,851,285,6
24
2,195,041,9
02
2,424,544,24
1
Shareholde
rs' equity
Share capital 600,000,0
00
600,000,000 600,000,000 600,000,000 600,000,000
Revaluation
reserve- - - - 2,291,186,98
4
Retained
earnings- - 4,501,751 169,690,60
8
372,795,44
1
Total
shareholders
equity
600,000,0
00
600,000,000 604,501,751 769,690,608 3,263,982,42
5
Total long
term
liabilities &
equity
651,482,5
05
1,648,018,0
88
2,455,787,3
75
2,964,732,5
10
5,688,526,66
6
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Tulsi Pharmaceuticals Limited
Income Statement
Particulars
For the year ended
30 June 2010 30 June2009 30 June 2008
Taka Taka Taka
Net Sales (After vat adjustment) 950,808,145 507,819,297 40,740,979
Cost of sales (164,914,909) (119,403,592) (10,262,332
)
Gross profit 785,893,236 388,415,705 30,478,647
Administrative Expenses (12,806,995) (9,512,814) (6,457,092)
Selling, Marketing & Distribution
Expenses
(69,863,859) (40,584,300) (11,804,392
)
Net profit before financial expenses 703,222,382 338,318,591 12,217,163
Financial expenses (81,896,647) (55,500,911) (4,714,245)
Net profit after financial expenses 621,325,735 282,817,680 7,502,918
Net profit before taxation 621,325,735 282,817,680 7,502,918
Income Tax @ 40% 248,530,294 113,127,072 3,001,167
Net profit after Taxation 372,795,441 169,690,608 4,501,751
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Tulsi Pharmaceuticals Limited
Cash Flow Statement
Particulars
For the year ended
30 June 2010 30 June 2009 30 June 2008
Taka Taka Taka
a) Cash flow from operating activities:
Collection against sales 547,359,636 310,851,871 58,750,088
Payments to creditors (296,842,000) (206,275,158) (73,830,895
)
Other operating expenses (157,700,701) (104,300,968) (45,381,102
)
Payment to others (5,498,321) 2,902,602 2,278,335
Interest paid (66,348,484) (42,216,658) -
Net cash generated from operating
activities
20,970,130 (39,038,311) (58,183,574
)
b) Cash flow from investing activities: - - -
Acquisition of property, plant &
equipment
(210,755,744) (24,616,053) (107,938,85
1)
Disposal of property, plant & equipment - - -
Net cash generated from investing
activities
(210,755,744) (24,616,053) (107,938,85
1)
c) Cash flow from financing activities: - - -
Long term loan received 65,177,824 129,235,041 71,940,615
Long term loan refund - (11,054,663) -
Short term loan received 237,626,972 110,770,791 122,310,48
7
Short term loan refund (49,928,101) (39,036,825) (30,544,094
)
Net cash generated from financing
activities
252,876,695 189,914,344 163,707,00
8
d) Net cash increase/decrease(a+b+c) 273,846,825 126,259,980 (2,415,417)
e) Cash & cash equivalents opening 27,681,552 1,421,572 3,836,989
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f) Cash & cash equivalents - closing
(d+e)
301,528,377 127,681,552 1,421,572
Directors of the company:
Description of the directors
Short Bio data of the directors:
Dr. Momenul Haque
Managing Director, GENERAL PHARMA pharmaceuticals limited
Mr. A. Matin Chowdhury is a renowned and dynamic personality in the pharmaceutical sector of
Bangladesh. He completed M.B.B.S. from Dhaka Medical College and postgraduate studies from the
U.K.
Dr. Sarah Momen
Director
Dr. Sarah Momen wife of Dr. Momenul Haque, completed M.B.B.S. from Dhaka Medical College and
postgraduate studies from the USA Mrs. Sarah is a famous Child and Adolescent Psychiatrist. She was
the former Chief Consultant of Pabna Mental Hospital. She is also the Chairperson of Special Olympics
in Bangladesh.
Serial
No.
Name Age
(Years)
Qualifications Position
01 Dr. Momenul Haq, Managing Director 52 M.B.B.S. from DMC andpost graduation from U.K.
Director/Managing
Director
02 Dr. Sarah Momen, Director 35 M.B.B.S. from DMC andpost graduation from USA
Director
03 Mir Zaki Azam Chowdhury ,Director 47 M.Com in Marketing and
MBA from USA
Director Marketing
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Mir Zaki Azam Chowdhury
Director Marketing
Mir Zaki Azam Chowdhury completed his masters in marketing and completed MBA from USA with
major in marketing.
Securities of the company owned by the directors:
Name of the directors who owned the shares of the company
Sl.
No
Name Position Number of
shares
owned
Percentage
of
outstanding
Shares
01 Dr. Momenul Haq Manging
Director
5,54,56000 92.43%
02 Dr. Sarah Momen Director 45,00,000 7.50%
03 Mir Zaki Azam
Chowdhury
Director 44,000 .073%
Total 60,000,000 100%
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Determination of offering price:
The issue price at Tk.100.00 is justified as per the guidelines of the Securities and Exchange Commission
as detailed below:
(i) Net Asset Value per Share
The offering of the common stock of Tulsi pharmaceuticals Ltd has been determined by assessing the Net
Asset Value (NAV). The financial calculations presented below are from the audited accounts of 30th June
2010.
Sl. No. Particulars Amount in Million
Taka
A
Current Assets
Inventories 614.391
Loans and Advance 12.929
Cash and Bank Balance 7.772
Account Receivables 28.407
Fixed Assets 5,917.249
Total Assets 6,580.748
B
Short term borrowings 867.076
Accounts Payable 14.934
Accrued expenses 9.65
Tax payable 0.56
Long term borrowings 2,424.149
Liabilities from EWF 0.395
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Total Liabilities 3,316.764
C Net Asset Value (A-B) 3,263.984
D Number of shares 60,000,000
E Net Asset Value per share (C/D) 54.40
ProjectedEarning based value per share:
Tulsi pharmaceuticals limited Price earnings multiples
Company Name P/E Ratio
Beximco Pharma ltd. 21
Glaxo BD Limited 28
Reneta Limited 24
The Ibn Sina Limited 42
Orion Infusions 39
Square Pharma Ltd 22
Total 176
Average P/E ratio 29.33
Tulsi Pharmas net income in 2010 372,795,441
Numbers of share 60,000,000
EPS 6.21
Expected EPS in 2011 6.21*(0.066) 6.61986
Value of the share Expected (EPS*Industry P/E ratio)
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Average Market price of similar stocks:
CompanyName
AmbeePharma
BeximcoPharma
Ibn Sina GlaxoSmithClin
e
Basis of selecting
Company
Same management Same Product
Line
A Category
Company
Turnover Close
to GENERAL
PHARMA
company
Face Value (a) 10 10 100 100
Closing Prices
June 10 234.2 146.3 1,464.5 1,097.3
July 10 242.30 150.50 1,381.50 1,308.20
Aug 10 252.40 154.60 1,421.00 1,312.80
Sep 10 487.20 149.50 1,423.75 1,418.70
Oct 10 613.20 150.40 1,576.00 1,301.20
Nov 10 830.10 145.30 1,748.50 1,322.90
Average closing
Price (b)
443.23 149.43 1,502.54 1,293.52
Market Value
Multiplier (b/a)
44.323 14.94 15.025 12.9352
Average Market
value multiplier21.8058
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From the above it is clear that market price of prospective similar companies of Pharmaceuticals sector are o
average 21.8058 times higher than that of its face value. Based on this, we may assume that share prices of
Tulsi Pharmaceuticals Ltd. would be Tk. 218.05.
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Discounted Cash flow Method:
Tulsi Pharmas WACC was determined to be 9.18% using the following assumptions:
CAPM used to calculate cost of equity using beta of 6, risk-free rate of 8% (1 year T-
bond), and market risk premium of 12.65%. Cost of equity: )(RFmRF
RRR +=
=0.08+(.1265-.08)*.06
=0.08
Adjusted Weighted Average Cost of Capital:
Calculation of Adjusted WACC
Capital Book Value Cost of Capital Weight WACC
Debt 242 0.12 0.71 0.057
Equity 600 0.08 0.29 0.0348
Total 31520 1.0000 0.0918
G= ROE*Retention Rate
= 0.117*0.56=0.066
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Actual30-Jun-
1030-Jun-
1130-Jun-
1230-Jun-
13
Net Sales 95.97 0.56 148.32 231.38 360.95Less: Cost ofsales 16.47 0.17 25.21 39.33 61.36
Gross Profit 78.59 123.11 132.05 299.59less: TotalExpenses 16.45 0.18 26.63 41.65 53.93
EBT 62.63 96.42 150.4 245.66
Tax (.40)2485.00
% 38.57 60.16 98.264
EAT 37.28 57.85 90.24 147.396
0therdata:
Add: Net interestafter tax 6.63 0.15 7.62 8.763 10.07Unlevered NetIncome 43.91 65.47 99.003 157.466Change indeferred Tax -0.084 0.0122 0.015 0.0183
NOPLAT 43.826 65.4822 99.018157.484
3
add: Depreciation 5.17 7.65 11.32 16.76
Less: change inNWC 16.25 11.31 -12.61 4.22
Free Cash Flow 32.746 61.8222 97.728170.024
3
Discounted Cash flow=169.51 crore
Terminal value 2013=170.0243(1.066) / (0.0918-0.066)
=181.25/0.0258
=7025.19 crore
Terminal value2010= 7025.19/1.0918^4=4944.08 crore
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Firm value=169.51+4944.08-512(value of debt)= 4,601.06 crore
Value per share= (4601.06/ 6) crore =766.84
Dividend Discount Model:
Here,
Growth Rate, G= 0.066
Cost of capital, k= 0.0918
Expected DPS=Average EPS of the industry*Average Dividend Payout Ratio
=46.84*0.44=20.24
Value Per Share=D1/K-G=20.24/ (0.0918-0.066) = 784.50
Price to cash flow ratio:
Price/cash flow ratio= Pt/CFt+1CFt
=235.73/5.36*5.025
=230.92
Determining Offer Price:
Methods of determining value per share Amount in Taka
1.Net Asset Value Per Share 54.40
2.Value based on market value multiplier 218.08
3.Discounted Cash Flow method 766.84
4.Dividend Discount Model 784.50
5.Value based on Price Cash flow method 230.92
6.Value based on Price Earnings Per Share 194.160
Average value per share 374.82
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We recommend an offer price of 100.00 taka with the lot of 20 shares.