IPO flow sees slow pace in Jan-Oct

Fund raising through IPOs remained sluggish as only five companies, mostly small ones, and one mutual fund raised an aggregate amount of Tk 2.20 billion through IPOs in January-October period of 2017.
In 2016, eight companies and three mutual funds (MF) raised a total of Tk 8.49 billion through initial public offering (IPO).
The fund collection through IPOs remained low though investors are showing enthusiasm in the primary market, but the revised public issue rules kept them at bay.
The companies which raised funds through floating IPOs in January- October 2017 are: Shepherd Industries Tk 200 million, Nurani Dyeing & Sweater Tk 430 million, BBS Cables Tk 200 million, Aamra Networks Tk 562.50 million (book-building method), Oimex Electrode Tk 150 million, Nahee Alumium Composite Tk 150 million and one mutual fund ICB AMCL First Agrani Bank Mutual Fund Tk 500 million.
Of them, Aamra Networks raised funds through book-building method while rest of them raised fund under fixed price method.
Market insiders attributed the slow pace of collecting funds through IPOs to the revised Public Issue Rules-2015, which compelled many issuer companies to revise their IPO proposals.
"The revised public issue rules coupled with strict stance taken by the securities regulator regarding approval of any IPO were the main reasons for sharp decline in fund raising through IPOs," Khairul Bashar Abu Taher Mohammed, chief executive officer of MTB Capital, told the FE Wednesday.
Mr Bashar, also secretary general of Bangladesh Merchant Bankers Association (BMBA), said, currently the IPO seeking companies required more time to fulfil the requirements under the amended public issue rules.
He noted that lack of manpower in the Bangladesh Securities & Exchange Commission, also a barrier for quick approval of IPOs, as regulator is taking more time to give approval to an entity's IPO.

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