Walton, the Bangladeshi electronics giant, has now become an international brand in its journey of more than two decades. In September 2020, the company was listed on the Bangladesh Stock Exchange through IPO. On July 14, 2022, the market capitalization of all companies listed on the Dhaka Stock Exchange was more than 5 lakh 16 thousand crores (5,16,000 Crore). At the same time, Walton’s market cap was Tk 32,667 crore. That is, more than 6 percent of the total market cap of the Dhaka Stock Exchange is in possession of Walton. Each share of Walton, which started trading at a cut-off price of Tk 252, was exchanged at Tk 1078 on July 14. Today, we will tell you about Walton’s IPO journey.
Overview
Late Alhaj SM Nazrul Islam, the founder of Walton Group, was born in 1929 in a noble Muslim family in the Tangail district. Although initially associated with the family business, in 1977, SM Nazrul Islam left the family business, started his own business, and founded Walton. In the same year, his two elder sons SM Nurul Alam Rezvi and SM Shamsul Alam, joined the business. Their business foresight ushered in a new era at the Walton Group when in 1991, the third son SM Ashraful Alam and in 1992 the fourth son SM Mahbubul Alam joined the business, expanding Walton’s branch in Dhaka. In 1996, the fifth son SM Rezaul Alam established another branch of Walton in Chittagong. Walton also joined the electronics business in 1997 by expanding the business at various times under changing circumstances.
In 2007, Walton established its own production plant in Gazipur for TVs, Fridges, ACs, and Motorbikes. “Walton Hi-Tech Industries Limited”, one of the leading companies of Walton Group, started its journey by starting commercial production and sales activities in the following year after the trial production, which is currently known as Walton Hi-Tech Industries Plc. Walton entered the digital device market in 2010 by starting the production of mobile phones. Walton Micro-Tech Corporation was established the same year. By 2011, Walton started exporting various home appliances, including air conditioners, televisions, etc. A full-fledged television manufacturing plant was established in 2013 under Walton Micro-Tech Corporation. In 2015, the company occupied about 80 percent of the local refrigerator and about 30 percent of the television market share. From that year, Walton’s annual production increased to 14 lakh refrigerators, 10 lakh televisions, 3 lakh motorcycles, and 3 lakh air conditioners. At that time, the company had 14,000 employees, out of which 1,000 employees were working in the R&D division. Bangladesh’s only compressor manufacturing unit was established at Walton Hi-Tech Industries in Chandra in April 2017. In addition to this, Walton established a mobile handset manufacturing plant in October, which has the capacity to manufacture 3 million handsets annually. That year, the company was able to sell more than 12 lakh units of smartphones and more than 41 lakh units of feature phones in the local market.
Walton started manufacturing computers, laptops, and ICT products in the country in 2018. In 2019, Walton and Hyundai Electronics signed an agreement to supply 1 lakh units of refrigerators and 20,000 residential air-conditioners. In 2020, Walton invested Tk 50 crore and established Bangladesh’s first elevator manufacturing plant at Chandra, Gazipur. In November of the same year, the company started exporting its manufactured washing machines to India. As a result, the company’s revenue rose several times from FY 2015-16 to FY 2020-21.
In FY 2015-16, Walton’s revenue grew by 27 percent over the previous year to Tk 2,656 crore, and in FY 2017-18, the company’s revenue stood at Tk 2,733 crore. In FY 2018-19, the company’s revenue almost doubled to Tk 5,177 crore. However, due to the nationwide lockdown and worldwide trade shut down due to the Corona epidemic, Walton’s revenue fell by almost 21 percent to Tk 4,107 crore in FY 2019-20.
Journey Towards Capital Market
On September 23, 2020, Walton Hitech Industries Limited started its journey in the stock market by being listed on Dhaka Stock Exchange and Chittagong Stock Exchange. Walton Hi-tech’s pre-IPO paid-up capital was Tk 300 crore, and authorized capital was Tk 600 crore.
On June 23 that year, the Bangladesh Securities and Exchange Commission (BSEC) approved Walton’s IPO proposal. The company proposed to raise around 100 crore BDT against 29 lakh 28 thousand 343 ordinary shares. Of the Tk 100 crore, about Tk 61 crore (60.96 crores) was raised from eligible investors, and general investors raised the remaining Tk 39.03 crore. Walton’s IPO subscription runs from August 9 to August 16. According to the Financial Express reports, about 14 lakh (13,79,367) shares have been allocated to eligible institutional investors under the book-building method at Tk 315 each. The remaining over 15 lakh (15,48,976) shares were priced at Tk 252 at a 20-percent discount for general investors.
In October of the same year, engineer Golam Murshed, who had joined the company as in charge of production in 2010, took charge as the CEO and managing director of Walton Hi-Tech Industries Plc. He was instrumental in getting Walton Hi-Tech Industries plc listed on the stock market as Additional Managing Director before taking over as CEO and MD. In fact, under his direction, Walton managed to maintain excellent performance in the post-IPO year and during the Corona pandemic. In the post-IPO fiscal year 2020-21, the company’s revenue increased by 70 percent to nearly Tk 7,000 crore compared to the previous fiscal year. In addition, the company’s Net Profit after Tax increased to Tk 1,639 crore that year. Besides, the firm recommended a 250 percent cash dividend for common shareholders and a 170 percent cash dividend for sponsors and directors. At this time, Walton Hi-Tech had a total current asset value of Tk 6,709 crore.
In addition to exporting its products to 40 countries worldwide, Walton has confirmed its global presence by establishing branches and liaison offices in 6 countries, including USA, India, Nepal, and UAE. Furthermore, Walton established a subsidiary in the USA in 2021 to strengthen its global presence. In addition, the company plans to expand its operations to 27 countries by 2027. In April 2022, it acquired three European brands – Acc, ZEM, and VOE, along with their trademarks and branding rights in 57 countries.
In the first nine months of FY 2021-22, the revenue of Walton was Tk 5,360 crores which are 25 percent more than the previous financial year. At this time, the amount of gross profit was Tk 1,648 crores, i.e., the gross profit margin stands at 31%. Also, the company’s net profit was Tk 820 crore, i.e., the net profit margin was 15.3%. Currently, Walton’s cash amount is around 300 crores. Besides, the company now has a total debt of Tk 4,371 crore against total assets of Tk 15,557 crore.
Despite the presence of international and local brands in the consumer electronics market of Bangladesh, Walton has overtaken all other companies in several product categories to occupy the top position in the market. Besides the Bangladeshi market, the company sells its products internationally and tries to establish itself as a global brand. If this trend continues, it is hoped that the company will also maintain such success in the future.
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