BSEC takes time to give final approval

The securities' regulator is likely to approve the IPO proposals, which are awaiting the regulatory approval, under the existing public issue rules as it might be difficult for the companies to submit revised proposals.
On April 27 last, the Bangladesh Securities and Exchange Commission (BSEC) approved the revised public issue rules bringing some changes both in fixed price and book building method. The latest amendment will come into effect after taking public opinion.
"The companies which will submit IPO (initial public offering) proposals after enactment of the proposed amendment will have to go public as per the revised rules," said a senior official of the securities regulator.
He, however, said only the proposed provision regarding price bidding by eligible investors (EIs) may be applicable for the companies which already submitted IPO proposals to go public under book building method.
A total of 12 IPOs (initial public offering) worth above Tk 9.71 million are presently awaiting the regulatory approval under the existing book building method.
On the other hand, another 12 companies have submitted IPO proposals to raise an aggregate amount of fund worth above Tk 2.10 billion under the fixed price method.
Mohammad Saifur Rahman, a BSEC executive director, said the securities' regulator is discussing the issue regarding approval of pending IPO proposals.
"It will take some time to give final approval to the revised public issue rules. The regulator is likely to allow the pending IPOs under the existing rules," said Rahman, also the spokesperson of the securities' regulator.
Another BSEC official also echoed with Rahman saying that the companies may face some difficulties if they bring change in IPO proposals to fulfill the proposed conditions.
As per the existing rules, a company having a minimum paid-up capital of Tk 150 million at par can offer at least 10 per cent of its paid-up capital (including intended offer) or Tk 150 million at par value, whichever is higher.
As per the proposed provision of the revised fixed price method, a company willing to go public must have a minimum paid-up capital of Tk 150 million and the size of IPO will be Tk 300 million.
As per the proposed provision of book building method, a company must have a minimum paid-up capital of Tk 300 million and the size of IPO will be Tk 500 million, including premium.
The BSEC has set the provision of applying for maximum 2.0 per cent securities of respective quota of eligible investors (EIs), whereas an EI can quote for up to 10 per cent of the total amount offered to the EIs as per the existing provision,.
And the securities will be allotted as per the ratio of securities applied by all EIs.
The securities regulator has reduced the quota for EIs following the suggestions put forward by stakeholders, including the Dhaka Stock Exchange (DSE).
In their suggestions, the stakeholders said only 10 EIs have a scope to fix the cut-off price, at which EIs get securities, as one quote for up to 10 per cent of the securities offered for them.
The securities regulator has proposed a lock-in of three years on the shares of sponsors, directors and other shareholders having shares above 10 per cent of the company's total paid-up capital. As per the existing provision, this lock-in period is applicable to the shareholders having 5.0 per cent shares compared to total paid-up capital.
Among the companies which submitted IPO proposals to go public under book building method, Aamra Networks will raise Tk above Tk 562.50 million, STS Holdings (Appollo Hospitals) Tk 300 million, Dhaka Regency Hotel and Resorts Tk 600 million, Bashundhara Paper Mills Tk 2.0 billion,  Aman Cotton Fibrous Tk 800 million, Runner Automobiles Tk 1.0 billion, Popular Pharmaceuticals Tk 700 million, Delta Hospital Tk 500 million, Bengal Poly and Paper Sack Tk 550 million, Index Agro Industries Tk 400 million, Shamsul Alamin Real Estate Tk 800 million and Esquire Knit Composite Tk 1.50 billion.
Among the companies which have submitted IPO proposals under fixed price method, IfCO Garments & Textiles proposes to raise a fund worth Tk 200 million, Intraco Refueling Station Tk 200 million, Oimex Electrodes Tk 150 million, Amulet Pharmaceuticals Tk 150 million, Nahee Aluminum Composite Panel Tk 150 million and Indo-Bangla Pharmaceuticals Tk 200 million, VFS Thread Tk 220 million, Kattali Textile Tk 230 million, Genex Infosys Tk 200 million, M. L. Dyeing Tk 200 million, Queen South Textile Mills Tk 150 million and Advent Pharma Tk 200 million.
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