Some 26 companies and two mutual funds (MFs) raised an aggregate amount of fund worth above Tk 16.45 billion, including the premium, from the capital market under fixed price method within the timeframe of January, 2013 to October, 2014.
Among 28 companies, 11 offloaded shares with premium whereas the remaining 17 went public without any premium of their companies' shares.
Four other companies whose IPO (initial public offering) subscriptions are yet to be completed will collect an aggregate amount of fund worth above Tk 3.01 billion. The companies are: IFAD Autos, C & A Textiles, National Feed Mill and Shasha Denims.
On the other hand, the country's capital markets witnessed no flotation of closed-end MFs in last 18 months.
Some of the asset management companies (AMCs) have said due to post effect of 2010-11 stock market debacle the demand of MFs became thin and sponsors also showed less interest to float MFs.
The officials of the Bangladesh Securities and Exchange Commission (BSEC) said the regulator approved the last IPO proposal of ICB AMCL Sonali Bank Limited 1st MF on March 19, 2013.
The companies which went public in 2013 are: Orion Pharma, Bengal Windsor Thermoplastic, Familytex (BD), Central Pharmaceuticals, Fareast Finance and Investment, Bangladesh Building System, Paramount Textile, Appollo Ispat Complex, Mozaffar Hossain Spinning Mills and AFC Agro Biotech.
The companies which went public till early October, 2014 are: Emerald Oil Industries, Hwa Well Textile, Far Chemical Industries, Peninsula Chittagong, Shahjibazar Power, Khulna Printing and Packaging, Tung Hai Knitting and Dyeing, Shurwid Industries, Far East Knitting and Dyeing, Saif Powertec, Ratanpur Steel Re-Rolling Mills (RSRM), Western Marine Shipyard, Khan Brothers PP Woven Bag and Hamid Fabrics.
Several times the regulatory approval to some IPO proposals drew criticisms as those ones allegedly went public being over priced.
Mohammad Saifur Rahman, a BSEC executive director and spokesperson, said the securities regulator allowed companies to go public on regular basis for the sake of maintaining a balance between demand and supply.
"There was a demand of IPOs in primary market and the secondary market also absorbed those ones due to its own capacity," Rahman said.
He said the regulator approves the IPO proposals based on some criterion and other parties such as issue manager and auditors have responsibility to ensure due diligence of a company willing to go public.
Asked, about the regulator's role in making the auditors and issue managers accountable, Rahman said by this time the BSEC gave exemplary punishment to two issue managers for their alleged involvement behind faulty IPO proposals.
"Similarly, the move of introducing Financial Reporting Act (FRA) came as part of making the auditors accountable," Rahman added.
The former chairman of the securities regulator Faruq Ahmad Siddiqi said the regulator must maintain a balance between demand and supply of capital market. "But the BSEC should not depend only on issue managers and auditors to contain flaws in IPO proposals," Siddiqi said.
He mentioned the recent proposal of Chittagong Stock Exchange (CSE) on giving approval to IPO proposals based on their merits.
"I think, to some extend the securities regulator should come out of its regular trend of approving IPO proposals, although I do not support the CSE's proposal, In that case, the regulator can enhance its capacity by appointing their own analyst and auditor," said Mr. Siddiqi.
He also stressed case to case basis investigation before approving any faulty IPO proposal.
Among the companies which went public with premium, the premium received by Orion Pharma was almost five times of the face value of each share. The company raised a fund worth Tk 2.4 billion and of this amount Tk 2.0 billion came from premium. Appollo Ispat Complex raised a fund worth Tk 2.2 billion and of this fund the amount of premium was Tk 1.2 billion.
The IPO size of Peninlsula Chittagong was Tk 1.65 billion including the premium of Tk 1.10 billion.
Western Marin Shipyard collected a fund worth over 1.57 billion, including the premium worth Tk 1.12 billion.
Bengal Windsor Thermoplastic raised a fund worth Tk 400 million, including the premium worth Tk 240 million.
Matin Spinning Mills went public with an offer price of Tk 37.0 including a premium of Tk 27.0 for each ten taka share. The company's IPO size was above Tk 1.26 billion, including the premium of Tk 920 million.
The IPO size of Shahjibazar Power Company was Tk 316.8 million and of this fund above Tk 190 million came as premium.
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