Bangladesh govt may reconsider in IPO restriction

The government is likely to reconsider its decision that new companies -- willing to float IPO -- will have to offer shares equivalent to 40 percent of their paid-up capital. After a meeting with a Chittagong Stock Exchange delegation at his office yesterday, Finance Minister AMA Muhith told reporters that the finance ministry would consider the proposals of bourses in the interest of the market, BSS reports. The finance ministry at a meeting on November 5 took a series of decisions tightening capital market rules. CSE delegates told the minister that the ministry's decisions, if implemented, would hinder the market growth. The decisions include allowing IPO floatation by new companies that will offer shares equivalent to 40 percent of paid-up capital. Another move was to ban the direct listing of private companies. The CSE delegation, led by its President Fakhor Uddin Ali Ahmad, told the minister that the restrictions on IPO would discourage many companies with high paid-up capital to come to market. According to a CSE proposal, the minimum requirement for IPO flotation can be fixed at 25 percent -- instead of 40 percent -- for the companies with Tk 500 crore in paid-up capital. For those with more than Tk 500 crore in paid-up capital, the IPO size can be 15 percent of paid-up capital, the CSE proposed.