Forty companies are waiting to raise around Tk 3,000 crore from the country’s capital market by floating initial public offerings.
Of the firms, 12 companies are expected to raise Tk 1,568 crore in total under the IPO book building method, while the rest 28 would raise Tk 1,400 crore under the fixed price method.
Of the IPO seeking companies, most of them are poor- and small-capitalised companies as good companies including multinational and state-owned ones are reluctant to come to the capital market as they prefer banks for meeting their financial need.
Stock market experts said strong policy and government’s incentives were needed to bring better companies to the market.
They also said that delay in IPO approval, widespread anomalies on the market, poor regulatory control, unpredictable regulations and asymmetrical regulatory approach towards the companies and institutions were the other reasons for the companies’ reluctance.
Of the 40 companies, Hajj Finance Company would raise Tk 15 crore, Anik Trims Tk 30 crore, Three Angle Marine Tk 32 crore, Taufica Foods and Agro Tk 30 crore, Karim Spinning Mills Tk 15 crore, Electro Battery Tk 22 crore, Crystal Insurance Tk 16 crore, Desh General Insurance Tk 16 crore, Al-Faruque Bags Tk 30 crore, BD Paints Tk 20 crore, SF Textile Tk 18 crore and Bonito Accessories Industries Tk 30 crore under the fixed price method.
Robi Axiata has recently signed an agreement with IDLC Investment to raise around Tk 500 crore under the fixed price method.
Badar Spinning Mills and Virgo Pharmaceuticals also planned for raising funds through IPO.
Besides, PEB Steel Alliance would raise Tk 15 crore, ACHIA Sea Food Tk 20 crore, Sonali Life Insurance Tk 19 crore, Associated Oxygen Tk 15 crore, Gardenia Wears Tk 20 crore, Mohammed Elias Brothers Poy Tk 25 crore, BD Thai Food and Beverage Tk 15 croe, AFC Health Tk 17 crore and Oryza Agro Industries Tk 25 crore, Express Insurance Limited Tk 26.79 crore, Desh General Insurance Tk 16 crore and Crystal Insurance Tk 16 crore under the fixed price method of IPO.
Under the book building method of IPO, Modern Steel intends to raise Tk 200 crore, JMI Hospital Requisite Manufacturing Tk 75 crore, Aman Tex Tk 200 crore, Omera Petroleum Tk 238 crore, Shamsual Alamin Real Estate Tk 80 crore, Delta Hospital Tk 50 crore, Index Agro Tk 50 crore, Energypac Power Generation Tk 149.86 crore and Baraka Patenga Power Tk 225 crore.
Lub-rref (Bangladesh) has applied to raise Tk 150 crore, Walton High-Tech Industries Tk 100 crore and Mir Akhter Hossain Tk 125 crore under the book building method.
According to the information in their IPO prospectuses, most of the companies have planned to raise funds in order to repay long-term bank loans and to expand their existing business capacity in line with the growing demand for their respective products.
The number of pending IPOs has increased recently as the Bangladesh Securities and Exchange Commission has almost stopped providing IPO approval to companies for months following a spate of criticisms from different quarter against the market regulator over approving of fundamentally weak companies.
The BSEC under the current commission with Khairul Hossain at helm has approved around 90 companies since 2011 and the Dhaka Stock Exchange had reservations about 60 of them.
The business operations of a number of the companies were shut down, some of them were placed in the junk category for not providing dividend and shares of many of them were trading below the face value (Tk 10 per share).
The BSEC approved most of the companies with huge placement shares that ultimately were dumped on the ill-fated general investors on the secondary market.
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