IPO flow dips 61pc in FY 2016-17

Dhaka,  Thu,  21 September 2017
Published : 20 Jun 2017, 21:58:41
printer

IPO flow dips 61pc in FY 2016-17

"It was not possible for some companies to go public fulfilling additional requirements. I think it was one of the reasons responsible for reduced number of IPOs in the FY 2016-17," BSEC ED said
Mohammad Mufazzal


The amount of funds raised through IPO (initial public offering) declined by 61 per cent in the fiscal year (FY) 2016-17 compared to previous FY 2015-16.

In the FY 2016-17, six companies and three MFs raised an aggregate amount of capital worth Tk 3.27 billion, which was 61 per cent or Tk 5.31 billion less than the amount of fund raised in the FY 2015-16.

The officials of the securities regulator said the amount of raising capital declined during the FY 2016-17 due to different reasons including the increased number of compliances included in the revised public issue rules.

On the other hand, the issue managers said the number of approving IPOs was not up to the mark due to go slow policy of the securities regulator.

According to information of the Bangladesh Securities and Exchange Commission (BSEC), six companies and three MFs raised an aggregate amount of capital worth Tk 3.27 billion, without any premium, in the the FY 2016-17. The companies raised capital under the fixed price method.

During the FY 2015-16, 11 securities, including two MFs, raised an aggregate amount capital worth Tk 8.58 billion.

Of Tk 8.58 billion, Tk 5.14 billion came through premium taken by five companies.

Of the companies which went public in 2016-17 under the fixed price method, Yeakin Polymer raised a capital worth Tk 200 million, Fortune Shoes Tk 220 million, Shepherd Industries Tk 200 million, Pacific worth Tk 750 million, Nurani Dyeing & Sweater Tk 430 million and BBS Cables Tk 200 million.    

The three MFs floated in the FY 2016-17 are Vanguard AML Rupali Bank Balanced Fund, CAPM BDBL Mutual Fund 01 and SEML IBBL Shariah Fund.

The total size of Vanguard AML Rupali Bank Balanced Fund was Tk 2.0 billion and the fund collected Tk 950 million from public.

The size of CAPM BDBL Mutual Fund 01 was Tk 100 million and the fund collected Tk 70 million from public.

SEML IBBL Shariah Fund was floated with a size of Tk 1.0 billion and the fund collected Tk 750 million from public.

Mohammad Saifur Rahman, a BSEC executive director, said the securities regulator has revised public issue rules including more compliance requirements for the issuer companies.

"It was not possible for some companies to go public fulfilling additional requirements. I think it was one of the reasons responsible for reduced number of IPOs in the FY 2016-17," Rahman said.

An issue manager said on the condition of anonymity that some companies were not able to go public due to go slow policy of the securities regulator.

He said after bringing amendment to the public issue rules in 2015, the BSEC asked some companies to submit revised proposals conducting road shows to go public under booking method.

"In April, 2016 some companies submitted IPO proposals by conducting road shows as per revised rules. Of those companies, only Aamra Networks got the regulatory consent under the book building method," said the issue manager.

"The securities regulator did not approve IPOs under book building method while bringing further amendment to public issue rules in 2017 to avoid any complexity. That's why the number of approving IPOs was not up to the mark in the FY 206-17," the issue manager added.

On June 13, 2017 the securities regulator gave its final approval to the revised public issue rules changing some provision both in book building and fixed price method.

On the same day, the regulator approved the IPO proposal of Aamra Networks which will raise a capital worth Tk 562.50 million under book building method.

mufazzal.fe@gmail.com
ADDRESS
Editor : A.H.M Moazzem Hossain
Published by the Editor for International Publications Limited from Tropicana Tower (4th floor), 45, Topkhana Road, GPO Box : 2526 Dhaka- 1000 and printed by him from City Publishing House Ltd., 1 RK Mission Road, Dhaka-1000.
Telephone : PABX : 9553550 (Hunting), 9513814, 7172017 and 7172012 Fax : 880-2-9567049
Email : editor@thefinancialexpress-bd.com, fexpress68@gmail.com
Copyright © 2017. All rights reserved
Powered by : orangebdlogo
close