Written by The Banking Post
The capital market regulator has overhauled the country’s IPO rulebook, expressing confidence that the reforms will help attract quality companies to the stock market this year after a prolonged drought of major listings.
The Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025 were gazetted on December 30 and came into force immediately. Under the revised framework, stock exchanges will play a stronger role in the IPO process by granting preliminary approvals, while the securities commission will issue final clearance based on their recommendations.
The new rules set a minimum paid-up capital of Tk 30 crore for IPO-bound companies and require at least 10 per cent of post-IPO shares to be offered to the public. Issuers will also have to fully utilise IPO proceeds within five years of completing the offering.
The commission described the revision of IPO regulations as one of its most challenging reform tasks, following earlier changes to mutual fund and margin rules. Officials said the updated framework is designed to support market stability and deliver long-term benefits.
For more than a year, the regulator had tried to bring state-owned and multinational companies to the market, but none materialised. Repeated meetings failed to produce results, fuelling investor frustration over the absence of strong new listings.
An investor said a single well-known company can revive confidence, recalling how past listings of large corporates helped stabilise the market. Another investor said prolonged delays have discouraged many participants from staying invested.
A senior official acknowledged that bureaucratic complexities stalled progress, particularly in listing state-owned enterprises, despite directives from the highest level. Efforts to directly list 18 such companies failed due to delays and lack of coordination among relevant ministries, the official said.
The commission remains hopeful that quality companies will come to the market under the new rules. It also defended its decision to cancel several IPO applications inherited from the previous commission, saying many of those proposals involved weak fundamentals that had contributed to volatility and manipulation.
Market intermediaries, however, note that merchant banks have become cautious after earlier IPO processes were halted. The brokers’ association said the chances of new IPOs before the national election are slim, arguing that stronger governance is needed to restore investor confidence.
According to the association, Bangladesh still trails regional peers in market governance indicators, and stability is more likely to return after the next general election and the formation of a new government.
Meanwhile, an earlier attempt to centralise IPO management of major companies through the state-owned Investment Corporation of Bangladesh failed to deliver results. The institution has been struggling financially, posting losses of more than Tk 1,200 crore in the 2024–25 fiscal year. Its leadership, however, said past losses were linked to investments in poor-quality IPOs and expressed optimism that stronger listings could help change the market’s trajectory.
Market analysts say the revised IPO rules tighten safeguards against manipulation and may make listing more demanding, but they expect the reforms to support healthier capital market development over time.
