SEC may relax IPO size rules for unlisted insurance cos

FE Report

The securities regulator might overlook the minimum IPO-size requirement to enable a few unlisted insurance companies to go public.

Under the existing insurance act, the minimum paid-up capital requirement for a life insurance company is Tk 300 million and for non-life Tk 400 million.

But the Securities and Exchange Commission (SEC) has recently fixed the minimum IPO size of a company willing to float its shares for public subscription at Tk 400 million.

"It is difficult for the SEC to allow a company to float shares below the required IPO size fixed by it recently," said an SEC official.

"We have recently received a proposal from an insurance company to float shares valued below the minimum requirement", he said.

The commission discussed the issue and asked the company concerned to get approval of the insurance sector regulator, he added.

"The SEC will consider their application with positive attitude if the insurance regulator approves its IPO size," the official said.

There are 60 private insurance companies operating in the country of which 45 are already listed with the bourses.

The listed insurance companies have market capitalisation of Tk 83.7 billion at the end of February with their price-earning ratio hovering around 34.