Greater part of general investors in IPO sought

Staff Correspondent | Published: 00:00, Jun 18,2019

 
 

The stock exchanges, brokers and merchant bankers of the country have submitted their proposals to market regulator Bangladesh Securities and Exchange commission regarding amendment to the proposed public issue rules, asking for more involvement of the general investors in the initial public offering process.
Officials of the Dhaka Stock Exchange Brokers Association, Dhaka Stock Exchange, Chittagong Stock Exchange and Bangladesh Merchant Bankers Association met with the BSEC on Monday to place their opinions on amending public issue rules.
The BSEC on May 29 approved a draft proposal amending the public issue rules 2015 and sought public opinion within Monday.
All the bodies submitted same proposals to the regulator except on the issue of lock-in period for the placement shares.
The BMBA has differed with the stock exchanges and the regulator on the proposed lock-in period for placement shares.
The association on Monday proposed to keep the lock-in period 2 years while the stock exchanges and brokers wanted it to be 3 years from the trading day of the company.
The commission has proposed that all shares held at the time of according consent to the public offer shall be subject to lock-in for three years from the first trading day in the exchange.
Earlier, the commission said that no permission would be required for raising capital.
The commission proposed that the IPO quota facility for the general investors would be raised to 50 per cent from the existing 40 per cent under the fixed price method of IPO and it would be increased to 40 per cent from the current 30 per cent under the book building method.
The stakeholders demanded that the IPO quota facility for the general investors to be raised to 60 per cent under the fixed price method and to 45 per cent under the book building method.
They also demanded that the facility for the eligible investors and mutual funds should be 50 per cent under the book building method while it should be reduced to 30 per cent under the fixed price method.
The commission proposed that the size of the public issue under the fixed price method must be minimum Tk 50 crore or 10 per cent of the company’s paid-up capital, whichever was higher. And, the size of the public issue under the book building method must be at least Tk 100 crore or 10 per cent of the company’s paid-up capital, whichever was higher.
The stakeholders, on the other hand, proposed that the size of the public issue under the fixed price method must be minimum Tk 30 crore or 10 per cent of the company’s paid up capital, whichever was higher. And, the size of the public issue under the book building method must be at least Tk 75 crore or 10 per cent of the company’s paid-up capital, whichever was higher.

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