BSEC won't put quality IPO proposals on ice

The securities regulator has adopted a policy of clearing the quality IPO (initial public offering) proposals within shortest possible timeframe to facilitate timely implementation of issuer's business expansion plans.

"No IPO proposal from now on will remain shelved unnecessarily. The securities regulator will say 'yes or no' within expected timeframe on completion of its scrutiny," said a concerned commissioner of the securities regulator.

In last week, the Bangladesh Securities and Exchange Commission (BSEC) approved a workplan to accelerate the IPO proposal process for the sake of issuers and capital market as well.

As part of the plan, the securities regulator has redefined the job of staffs of the capital issue department.

The securities regulator said the raising of capitals through IPOs, debt and equity securities will be accelerated following its approval to the internal work plan.

Previously, many issuers had blamed the securities regulator for not getting clearance in proper time as the business plans could not be implemented in line with IPO proposal following the continuous price hike of materials.

"The incumbent commission found that many IPO proposals remained shelved for a prolonged time. It cannot be allowed and we have almost removed back locks after taking charge," the BSEC commissioner said.

He said the BSEC has rejected a good number of IPO proposals after detecting different non-compliances including window-dressed financials.

Issue managers have hailed the regulator's imitative along with making the demand of streamlining the entire ecosystem of raising capital.

"There are enough scope of streamlining end to end process in a bid to reduce time and expense of a company willing to be listed on the stock exchange," said Md. Moniruzzaman, managing director at IDLC Investments.

He said issuers in India do not hold IPO lottery to issue shares to general investors.

"Without holding lottery, shares are allocated to investors considering their subscription fees deposited up to a certain amount. This process reduces time and expense," Mr. Moniruzzaman said.

Another issue manager said on condition of anonymity that after getting the consent to start bidding it takes minimum five months to start the debut trading under the book building.

"The process of the company's listing will be easier if the timeframes of other procedures including issuance on consent letters are reduced," the issue manager said.

Apart from approving the way of determining cut-off prices by Energypac Power Generation, Mir Akther Hossain, and Lub-reff (Bangladesh) under book building method, the incumbent commission has rejected some 10 IPO proposals.

The companies whose IPO proposals have been rejected include JMI Hospital Requisite Manufacturing, B Brothers Garments, BD Paints, Beka Garments and Textile, SF Textile Industries, Al-Faruque Bags and Infinity Technology International.

"The job of the commission is to approve or reject an IPO proposal within a certain timeframe. That's why, we have set a work plan so that no IPO proposal from now on will remain pending," said the BSEC commissioner.

He said issuers should cooperate with the securities regulator in fulfilling deficiencies found in IPO proposals.

"We have adopted the policy so that the flow of IPOs does not go slow in coming days," said the commissioner of the securities regulator.

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