The stock market is now suffering from a severe IPO (Initial Public Offering) drought. Since 2023, no company has received approval for listing. The last IPO approval was granted to NRB Bank in November 2023. Since then, no company has submitted an IPO application to the Bangladesh Securities and Exchange Commission (BSEC), creating a significant gap between supply and demand in the market.
Industry insiders say that under the current circumstances, many investors have lost confidence in making fresh investments. Years of irregularities surrounding IPOs have eroded trust, and the current commission has failed to take effective measures to restore it.
According to BSEC sources, a new commission was formed in August last year. It announced a firm stance against previous irregularities and corruption. Several initiatives were also undertaken to restructure BSEC operations, streamline the IPO approval process, and reform the stock market. However, despite these promises of reform, no tangible improvements have been seen in the market.
After its formation, the current commission held several meetings with large domestic and multinational companies regarding potential IPOs and investments. Promises were also made about listing profitable state-owned enterprises. However, none of these discussions translated into real progress.
Since August of 2024, not a single IPO has been launched. In 2023, only four companies entered the market through IPOs. In contrast, 2020 and 2021 saw record-breaking capital raised through IPOs. Of the four companies approved by BSEC in 2023--NRB Bank, Best Holding, Asiatic Laboratories, and Techno Drugs--NRB Bank raised Tk 100 crore from its IPO. Best Holding raised Tk 350 crore, Asiatic Laboratories Tk 95 crore, and Techno Drugs Tk 100 crore, totaling Tk 645 crore collectively.
In 2023, three companies and one mutual fund entered the market through IPOs: Midland Bank raised Tk 70 crore, Trust Islami Life Insurance and Shikder Insurance raised Tk 16 crore each, and Capitec Grameen Bank Growth Fund raised Tk 100 crore. The total raised by these four entities stood at Tk 202 crore.
When contacted, Professor Abu Ahmed, Chairman of the Investment Corporation of Bangladesh (ICB) and a stock market analyst, told Bangladesh Pratidin, “In the past, there was not enough effort from the higher-ups to list good companies. There’s no incentive involved--so why would quality companies come forward? Now some work is being done in this regard. A task force has been formed and will look into it. Even if not monthly, we must ensure at least 4 to 5 good IPOs a year. Otherwise, no one will come to the stock market.”
Saiful Islam, President of the DSE Brokers Association of Bangladesh (DBA), told Bangladesh Pratidin, “The regulatory authority has become ineffective. We are now fearful. Those who might raise capital from the market are also losing hope. Our stock market is now running without IPOs and a stock market without IPOs is not a real stock market. IPOs must return; there is no alternative. We believe the current IPO process is not investor-friendly. The regulator must identify the problems and resolve them quickly.”
Bd-pratidin English/ ANI
