All IPO applicants to get shares if they invest Tk 20,000

Setting a precedent for 2021, the Bangladesh Securities and Exchange Commission (BSEC) yesterday ruled that every initial public offering (IPO) applicant will get shares if they have a minimum secondary market investment of Tk 20,000.

The securities regulator also decided to scrap the lottery system introduced for general investors in an IPO and allow every applicant to get shares on a pro-rata basis.

But these decisions of the commission will be effective from April 1.

During a commission meeting on the day, every BO account-holder should make subscriptions of at least Tk 10,000 in the IPOs. Currently, investors offer Tk 5,000 when they subscribe to an IPO.

In addition, the commission also decided to issue a letter of consent for both the bidding and prospectus in the book building system instead of giving the letter of consent in the existing two phases.

The decisions were taken based on the recommendations made by an IPO assessment committee formed by the BSEC, which was led by its director Md Mansur Rahman.

The commission also barred over 200 per cent bidders of five companies from participating as eligible investors in the next three initial public offerings under the book-building method for their aggressive pricing.