Baraka Patenga Power, a subsidiary of Baraka Power, is set to go public by using the book building method to raise Tk 225 crore to set up two power plants and pay back loans.

Book building is a process through which an issuer attempts to determine the price to offer for its security based on demand from institutional investors.

Of the proceeds from the initial public offering, Tk 144.33 crore will be used to set up power plants, Tk 74.87 crore for paying back long-term loans and Tk. 5.79 crore for IPO expenses.

The two power plants -- Karnaphuli Power and Baraka Shikalbaha Power -- will have the capacity to generate 215 megawatt. At present, Baraka Power's electricity generation capacity is 50MW.

Baraka Patenga, which will hold 51 percent stakes in both the plants, will have to fork out Tk 1,510 crore to set them up. Of the sum, 70 percent will come from banks and 30 percent through IPO.

Land procurement for Karnaphuli Power is already done and civil work has started, said Mohammed Monirul Islam, chief financial officer of Baraka Patenga.

"Shikalbaha Power is a fast-track project -- its engine is ready to run," he added.

LankaBangla Finance, the issue manager, will hold a road show for eligible institutional investors on March 28 at the International Convention City Bashundhara.

Baraka Patenga's half-yearly profits for financial year 2017-18 stood at Tk 15.29 crore with earnings per share standing at Tk 1.54. The net asset value on December 31, 2017 stood at Tk 17.67.

In another development, Star Ceramics, a manufacturer of tiles and sanitaryware, will also go public using the book building method to raise Tk 60 crore for business expansion and bank loan repayment.

Of the IPO proceeds, Tk 43.31 crore will be used for expansion of its sanitaryware plant and the rest for repayment of bank loans.

The net profit of Star Ceramics last year stood at Tk 20.65 crore, earnings per share Tk 1.38 and net asset value Tk 15.64.

Its road show will be held on March 29 at the Radisson Blu Dhaka Water Garden.