The Small Capital Board was discussed at a meeting between the Venture Capital and Private Equity Association of Bangladesh (VCPEAB) and the Bangladesh Securities and Exchange Commission (BSEC), at the BSEC office in Agargaon on Monday.
Bangladesh is set to form a Small Capital Board within two months, in order to facilitate the raising of funds through Initial Public Offerings (IPOs) for small capital companies.
The Small Capital Board was discussed at a meeting between the Venture Capital and Private Equity Association of Bangladesh (VCPEAB) and the Bangladesh Securities and Exchange Commission (BSEC), at the BSEC office in Agargaon yesterday.
VCPEAB Chairman and Fenox Venture Capital General Partner Shameem Ahsan led the VCPEAB delegation, which called on BSEC Chairman Dr M Khairul Hossain.
In addition to the time frame for formation of the Small Capital Board, the requirements for filing an IPO through the Small Capital Board were also discussed at the meeting.
With the introduction of the Small Capital Board, a company can apply for an IPO if it has minimum existing paid-up capital of Tk50 million, intends to raise its paid-up capital by at least Tk50 million through a Qualified Investor Offer (QIO), and if the company’s paid-up capital stands below Tk300 million after the QIO.
Previously, a company needed to meet several criteria, including Tk300 million in paid-up capital and profitability for three years, in order to apply for an IPO.
BSEC Chairman Dr M Khairul Hossain said: “We have come a long way in the implementation of rules for QIOs by small capital companies. We have already issued the gazette notification and are in the process of forming the Small Capital Board with the Stock Exchange at our side. This will bring improvement to the capital market in Bangladesh and bring a positive turn to the investment scenario.”
VCPEAB Chairman Shameem Ahsan said: “Access to finances is a major challenge for young entrepreneurs and startups, due to the unavailability of bank loans. It was difficult for IT firms to opt for IPOs, as they have lower paid-up capital and focus on growth rather than profitability. The formation of the Small Cap Board presents a viable solution for Venture Capital Firms and Investment Bankers, making the technology industry more lucrative. We are hopeful that their increased participation will benefit our thriving tech entrepreneurs and startups.”
BSEC Commissioner Dr Swapan Kumar Bala, Executive Director Hasan Mahmood and Director Md Mahmudul Hoque were present at the meeting, while the VCPEAB delegation included Vice President and VIPB Asset Management Company Limited Chairman Zia U Ahmed, Secretary General and BD Venture Limited Managing Director Shawkat Hossain, Founder and Managing Director of Maslin Capital Limited Waliul Maruf Matin, and Aavishkaar Frontier Fund (Bangladesh) Investment Manager Nazmul Karim.