Revised IPO guideline takes effect soon
Finance okays SEC proposal

Mohammad Mufazzal

The securities regulator is going to implement the guideline on Initial Public Offering (IPO) as early as possible.

The Securities and Exchange Commission (SEC) would likely to send the regulation manuscript to press Wednesday for printing it as gazette notification, an official said.

The move came after a revised regulation was set by the finance ministry on Initial Public Offering (IPO) on February 25 last based on a proposal sent by the Securities and Exchange Commission (SEC).

"As the ministry of finance set the regulation, the SEC needs no public opinion for its implementation," the official said.

According to the regulation, a company, which has a paid-up capital of less than Tk. 400 million will not be allowed to go public and at the same time a company having a minimum paid-up capital Tk. 500 million must go public.

The ministry of finance has brought about the changes in consultation with the securities regulator, which barred smaller firms from selling stakes to institutional investors in pre-IPO private placements.

A company having a paid-up capital of Tk. 500 million and above will require offloading a minimum of 40 per cent share.

A company, which has a paid-up capital of more than Tk. 750 million to Tk. 1500 million, would have to offload a minimum 25 per cent of the paid-up capital or Tk. 300 million worth of shares, whichever is higher.

A company, which has a paid-up capital of more than Tk. 1500 million, would have to offload a minimum 15 per cent or Tk. 400 million whichever is higher in terms of its paid-up capital.

At least three companies -- RAK Ceramics, Beacon Pharma and IIDFC - are awaiting SEC nod for public offerings without meeting the 40 per cent criteria imposed earlier by the finance ministry.