Ten IPOs to raise Tk 5.14b under revised public issue rules

Mohammad Mufazzal | Published: October 04, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

Some 10 companies' IPO (initial public offering) proposals presently are awaiting the regulatory approval for raising capital worth around Tk 5.14 billion as per revised public issue rules.
The companies have submitted their IPO proposals under fixed price method and book building method.
Among the companies, which submitted IPO proposals, five companies have targeted to raise capital worth Tk 3.96 billion under the book building.
On the other hand, five companies have submitted prospectus to go public under the fixed price to raise a capital worth Tk 1.18 billion.
The officials of the Bangladesh Securities and Exchange Commission (BSEC) have said the scope of submitting IPO proposals without proper due diligence has reduced after the revised public issue came into effect.
"It's positive for the market and investors," said a top official of the securities' regulator.
He said as per revised rules, the operating cash flow of a company must be positive for preceding two years of going public under book building method. Â
As per the revised public issue rules, the companies seeking premium are required to go public under book building method compulsorily. And the companies which not demand premiums will be allowed to go public under the fixed price method.
According to information of IPO prospectus, Aamra Network has proposed to raise a capital worth above Tk 262.50 million under the book building method.
Under same method, STS Holdings, Apollo Hospitals Dhaka, has submitted IPO proposal to raise capital of Tk 300 million,
Dhaka Regency Hotel and Resort will raise Tk 600 million under book building method.
Bashundhara Paper Mill will float IPO worth Tk 2.0 billion under book building method for purchasing machineries, repayment of bank loans and business expansion.
Aman Cotton Fibrous will raise a fund worth Tk 800 million under the book building method in order to setting up of a new specialized yarn spinning unit.
On the other hand, five companies have submitted IPO proposals under the fixed price method.
Among the companies, Ifco Garments & Textiles will raise a fund worth Tk 200 million, Shepherd Industries Tk 200 million, Nurani Dyeing & Sweater Tk 430 million, Intraco Refueling Station Tk 200 million and Oimex Electrodes Tk 150 million.
In January, 2016 the securities' regulator asked some companies, which earlier had submitted IPO proposals seeking premium under fixed price method, to revise their proposals as the amendment came into effect by that time.
The list of the companies, which were asked to redo IPO-launching method, include Aftab Hatchery, AND Telecom, Karim Spinning, Madina Cement Industries, Summit Uttaranchol Power Company, Aman Cement Mills, Shamsul Alamin Real Estate, STS Holdings and Dhaka Regency Hotel.
Some issue managers of these companies said they are trying to resubmit their proposals by complying with additional requirements.
Some of these companies like STS Holdings have completed road show to go public under book building method. Â
On January 5 last, the securities regulator approved the Energypac Power Generation's IPO proposal submitted to offer shares at premium under the fixed-price method.
But, later the securities regulator postponed the IPO of Energypac Power Generation as the revised public issue rules became effective before approving the company's public offer proposal.
Asked, a senior official of IDLC Investments, issue manager of Energypac Power Generation, said it may not be possible for the company to go public this year due to inability of fulfilling the requirement of positive operating cash flow.
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