Index Agro mulling to raise Tk 50 cr thru IPOs
The local poultry industry size is expected to double in the next decade in the backdrop of over 15 percent industry growth in the past years and anticipating huge demand Index Agro Industries -- a poultry and fish feed producer of day-old chicks is planning expansion.
It is planning to raise Tk 50 crore from capital market offering new IPOs
Poultry is the most consumed protein in the country with growing number of restaurants and changes in food habits pushing demand further up. The industry size is now $4.16 billion at the moment making it the second-largest contribution to GDP after garment.
With rising demand for chicken and fish, demand for feed is also rising. At present, their combined market size is $2.1 billion, according to a Brac-EPL study. It said over the next five years, poultry feed and fish feed segments is likely to grow by an average 5.6 per cent and 4.6 per cent respectively.
Bangladesh is largely dependent on India, China and South America for sourcing feed as local supply is insufficient. But Bangladesh government is collecting a 5 per cent advance income tax on imported raw materials, which include corn, soybean, rice barn, minerals and medicines.
Around 140 feed producers now operate in Bangladesh, with Paragon, Nourish, Kazi, CP, Aftab and Quality being the top players. But small feed producers are struggling to be competitive, said the Brac-EPL report.
The top 10 firms control 75 per cent of the market and Index Agro is raising Tk 50 crore from capital market to increase its production capacity. Index Agro is already in the business for quite some times. AFC Capital and EBL Investments are the issue managers for the company's IPO.