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Thrust on cut in approval time for IPO proposals

Bangladesh Capital Market Expo ends

FE Report | April 07, 2019 00:00:00

Discussants at a seminar on Saturday stressed the need for reducing the time of approving IPO (initial public offering) proposals to help well-performing companies fulfil their target of raising capital.

They also focused on other impediments, discouraging many companies from going public.

According to them, unwillingness of ensuring transparency and accountability, easy process of getting bank loans, trend in tax evasion, lack of corporate governance and hassle in the annual general meeting are the factors behind reluctance of many companies to go public.

The observations came at the seminar organised on the occasion of a three-day Bangladesh Capital Market Expo-2019 that began at Shilpakala Academy on Thursday.

Some of the discussants said due to a lengthy process of getting the regulatory approval, some companies are discouraged from going public.

Citing example, M Nasimul Hye, the company secretary of Bashundhara Group, said it took them a long time to bring a company of their group on the stock market through the book building system.

"The lengthy process of raising capital puts impact on implementation of the company's plans as the business scenario doesn't remain the same all the time," Mr Hye said.

Their sponsors wanted to withdraw IPO proposal three times, although their company was listed finally, he added.

Masud Khan, chief executive officer at Crown Cement, said compliance is a factor behind reluctance of big companies to go public.

"Some companies don't want to ensure transparency and accountability. That's why they try to keep them away from the capital market," Mr Khan said.

The securities regulator, however, earlier said it takes time to approve some IPO proposals as the companies do not fulfil criteria in due time.

Mahfuzur Rahman, the chief business development officer of United Securities, laid emphasis on setting bar to providing a big amount of loan to non-listed companies so that they raise capital from the stock market.

The discussants also said the companies involved with infrastructure developments have huge prospect due to bonanza of development works across the country.

In this regard, the CEO of Crown Cement Mr Khan said the necessity of cement and steel is increasing day by day for continuous urbanisation.

Abu Bakar Siddiq, the executive director of GPH Ispat, saw the bright prospect of the companies involved with infrastructure developments in future.

Sajjadur Rahman, business editor of The Daily Star, moderated the seminar organised by arthosuchak.com, an online news portal.

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