The initiatives are being taken to make IPOs more accessible to general investors
The Bangladesh Securities and Exchange Commission (BSEC) is set to amend a number of rules today particularly with the view to tightening the capital-raising process through the initial public offering (IPO).
It will also raise the quota facility for the general investors atthe commission meeting today, according to BSEC officials.
Currently, the IPO quota facility for the general investors has been set at 50 per cent under the fixed price method and 40 per cent under the book-building method.
The commission also proposed to make it mandatory for a listed company to get the consent from the regulator regarding raising capital through issuing equity shares. A directive would be issued soon, officials said.
Meanwhile, the regulator also moved to launch a price bar for bidding in the book-building method.
“This initiative has been taken to increase the participation of general investors in the IPOs,” Shaikh Shamsuddin Ahmed, commissioner of the BSEC, told Dhaka Tribune.
Earlier in July 2019, the BSEC amended a number of rules tightening capital raising process through IPOs and raising quota facility for the general investors by 10 per cent.
According to the final amendment to the public issue rules, 2015, a company will not be allowed to apply for public issue without using 80 per cent of its previously issued capital.
The issue of a company will be cancelled if the total application is below 65 per cent under the fixed price method.
The size of the public issue under the fixed price method must be minimum Tk 50 crore after IPO while the size of the public issue under the book-building method must be at least Tk 75 crore.