The BSEC are in dilemma over approving new initial public offerings (IPO) for raising money from the capital market as market insiders are demanding slowing down the process.
Following the negative trends at the secondary market the BSEC is contemplating to go slow listing new companies into the market but they are applying techniques instead of keeping the process officially stopped.
BSEC Commissioner Shamsuddin Ahmed Tuesday told Business Mirror there are actually some processes for IPO approval. After those processes, IPO approval was given in the capital market.” We do not have any organization to go to the final stage. As a result, there is no possibility of any company’s IPO approval soon”.
One new IPO approval after another seems to be behind the decline in transactions in the capital market over the last few working days. As a result, capital market analysts, including investors, have urged regulators not to approve new IPOs. Similarly, in the current market situation, analysts believe that the approval of additional IPOs is the reason for the decline in transactions and bids.
IPOs are not a bad thing for the capital market. However, an IPO in a good capital market actually stabilizes the market. But economist Abu Ahmed thinks that if the capital market is bad, slowing down the IPO will be a good sign for the capital market.
The BSEC, the regulator of the capital market, has decided not to approve a new IPO after a string of initial public offerings or IPOs left investors with huge sums of money. However, the company has said that the commission is not in the hands of the company to approve the IPO soon.
Even if there is a company, they have asked for more time to prepare their financial statements. E-Generation, Mir Akhtar Hossain Limited, Energypack, Robi have been listed on the stock exchange since December. Apart from this, the IPO application process has been completed with the collection of Tk 16 crore from Desh General Insurance and Tk 120 crore from NRBC Commercial Bank.
Baraka Patenga Power is being auctioned to determine the cut-off price for listing in the book building method. In the same process, Index Agro Limited wants to raise Tk 50 crore from the capital market. With so many IPOs coming up in the last two months, capital market transactions are expected to be strained for two reasons. Each IPO has received 10 to 20 times more applications for shares.
Investors are reimbursed within 35 working days after the lottery. As a result, huge sums of money have not yet been returned to investors. Apart from this, investors are incurring huge losses by investing in Robi, Energy Pack, Mir Akhtar Secondary Market. This figure has now exceeded two thousand crore rupees.
BSEC executive director and spokesperson Rezaul Karim said, “The IPO will be a little slow now. Because there is no IPO to give us now. It will take some time to process the existing ones. ‘He said,’ The commission had the file of Sonali Life Insurance. They also asked for time to prepare their financial statements. As a result, the IPO will be reduced in the future.