The Bangladesh Securities and Exchange Commission (BSEC) is taking a tough stand on merchant banks for not bringing any new initial public offerings (IPOs) in the capital market.
They said licences of some five merchant banks are set to be cancelled soon over their failure to bring any IPO, said a senior BSEC official, requesting anonymity.
A merchant bank is a financial institution that manages portfolios and conducts underwriting, loan services, financial advising, and fundraising services for large corporations and high-net-worth individuals.
The majority of merchant banks failed to bring IPOs in the last decade.
The three merchant banks which managed the highest number of IPOs are ICB Capital Management, LankaBangla Investments and IDLC Investments.
ICB Capital, a subsidiary company of state-run Investment Corporation of Bangladesh (ICB), solely managed 13 IPOs. The company also managed six IPOs jointly with other merchant banks.
ICB Capital Management managed the IPOs of South Bangla Agriculture & Commerce Bank, ADN Telecom, Ashuganj Power Station Company (Bond), Aman Cotton Fibrous, The Acme Laboratories, Saif Powertec, Shurwid Industries, Appollo Ispat Complex, Bengal Windsor Thermoplastic, Orion Pharma, Bangladesh Submarine Cable Company and GSP Finance Company (Bangladesh).
IDLC Investments managed eight IPOs solely and it managed no IPO jointly for the same period.
During the period, a total of 115 companies went public raising capital through IPOs and 32 IPOs of those were solely managed by only three merchant banks.
The remaining 43 merchant banks managed 83 IPOs during 2012-2022 and 20 merchant bankers had no role in bringing any IPO.
Apart from three merchant banks which managed a total of 32 IPos, Prime Finance Capital managed four IPOs solely, while AAA Finance managed four IPOs and Alliance Financial also managed four IPOs in the last one decade.
Besides, MTB Capital managed three IPOs, Banco Finance three IPOs, NRB Equity three IPOs, Janata Capital three IPOs, BRAC EPL Investments two IPOs, and Shahjalal Equity two IPOs.
Each of 10 merchant banks including AFC Capital, BD Finance Capital, Betaone, Citizen Securities, First Securities Services, Sonali Investment, and Union Capital managed one IPO during 2012-2022.
AFC Capital managed the highest number of IPOs jointly in the last one decade. The company managed 12 IPOs jointly with other merchant banks during the period.
