January 4 – The Bangladesh Securities and Exchange Commission (BSEC) has issued the updated Initial Public Offering (IPO) regulations through an official notice, expressing confidence that these changes will enable reputable firms to join the stock market this year.
As per the regulatory authority, the Bangladesh Securities and Exchange Commission (Public Offering of Equity Shares) Rules, 2025 were officially published on December 30 and became effective right after their release.
According to the updated regulations, the involvement of stock exchanges in admitting new firms has increased. Stock exchanges will now offer initial endorsement for IPOs, with the BSEC granting ultimate approval following the exchanges' suggestions.
The updated regulations also state that firms aiming for an initial public offering (IPO) must maintain a minimum subscribed capital of Tk 30 crores, with at least 10 percent of the shares after the IPO being made available to the stock market.
Additionally, issuers must utilize the capital obtained from initial public offerings within five years after the completion of the offering.
Speaking about the introduction of the updated IPO guidelines, BSEC Director and media representative Abul Kalam said to UNB, "Following changes made to the mutual fund and leverage provisions, the hardest part was updating the IPO policies. The authority completed the regulations and submitted them to the appropriate department before the end of December. These revised IPO norms are expected to provide advantages to the securities sector over time."
Long before the regulations were completed, the committee had been working for more than a year to attract reputable firms into the marketplace, yet these attempts did not come to fruition.
Although several gatherings were held to identify state-owned enterprises and global corporations, no significant firm joined the stock exchange, causing increasing dissatisfaction among investors.
Investor Sajjadul Islam stated, "One strong company has the potential to revitalize the market. However, the commission hasn’t managed to attract even a single such entity. When firms like Square Pharma, Grameenphone, or Robi joined the market, they boosted investor trust. Still, despite over a year passing, this commission remains unable to introduce any reputable company."
Another investor, Abul Hossain, mentioned that investors are looking forward to seeing quality businesses go public, yet ongoing postponements are causing several to lose interest in the market out of frustration.
Elaborating on why no reputable firm was included in the last year, a high-ranking BSEC representative, who requested confidentiality, mentioned that administrative challenges have slowed down development.
"Without these administrative obstacles, it could have been feasible to introduce quality state-run enterprises into the marketplace, despite multinational private firms being hesitant," the official stated.
He mentioned that the commission worked for an entire year to directly list 18 state-run enterprises. "Despite direct orders from the Chief Adviser, these firms couldn’t be listed because of delays and lack of cooperation from the relevant ministry officials. Even after multiple discussions and appeals, the matter wasn’t treated with proper seriousness."
When asked about potential new businesses entering the market according to the updated regulations, BSEC representative Abul Kalam expressed optimism that reputable firms would be added this year.
Nevertheless, investors have expressed concerns that since the commission took charge, several initial public offering requests that were already being processed were canceled. Consequently, investment banks serving as lead managers appear to have shown reduced enthusiasm for presenting fresh IPO suggestions.
we didn't hurry to include substandard firms," abul kalam stated, noting, "the majority of ipos endorsed by the prior committee belonged to low-standard enterprises, which unsettled the market and heightened manipulations. our aim is to eradicate manipulation and ensure solely reputable companies are admitted.
In the meantime, Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), stated that the chances of initial public offerings prior to the national elections are slim. He further mentioned that reputable firms would not consider going public unless proper management practices are reinstated in the stock market.
"Beyond comparing Bangladesh with India, when measured against Pakistan and Sri Lanka, Bangladesh significantly trails in terms of market governance ratings. Unless these problems are resolved, the capital market will not be able to resume regular operations," he stated.
Saiful mentioned that stability could come back following the 13th general election and the establishment of a new administration, offering a chance to reshape the market situation provided that reputable firms are introduced then.
According to commission officials, the task of overseeing initial public offerings (IPOs) for large corporations as an issuing entity was assigned exclusively to the state-run Investment Corporation of Bangladesh (ICB), yet this effort failed to produce outcomes.
A study revealed that ICB, which was previously a successful organization, is currently facing significant financial difficulties. During the 2024-25 financial year, ICB's losses surpassed Tk 1200 crore. The institution is staying afloat through borrowing and has frequently sold stocks to meet interest payments.
The chairman of ICB, Professor Abu Ahmed, nevertheless showed confidence in an improvement. "Although there have been numerous challenges, ICB has endured. Previously, its investments were made in low-quality initial public offerings associated with market fraud, resulting in substantial losses."
"We remain optimistic about seeing quality businesses being introduced into the market shortly. In addition to state-run firms, international corporations are also expected to enter the market, which could transform the entire landscape," he remarked.
Financial experts state that although the updated IPO regulations have enhanced protections against manipulative practices, they have simultaneously increased the difficulty of going public in certain situations. However, they maintain that these changes will ultimately support the development of the financial market over time.
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