The Bangladesh Securities and Exchange Commission (BSEC) has announced the publication of the new Initial Public Offering (IPO) rules in a gazette, voicing optimism that the reform will pave the way for quality companies to enter the capital market this year.

According to the regulator, the Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025 were gazetted on December 30 and have come into effect immediately upon publication.

Under the new rules, the role of stock exchanges in the listing of new companies has been strengthened. Stock exchanges will now grant preliminary approval to IPOs, while the BSEC will provide final approval based on the exchanges’ recommendations.

The revised rules also stipulate that companies seeking listing through IPOs must have a minimum paid-up capital of Tk 30 crore, and at least 10 percent of post-IPO shares must be offered to the capital market.

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Besides, issuers will be required to complete the utilisation of funds raised through IPOs within five years of completing the offering.

Commenting on the implementation of the new IPO rules, BSEC Director and spokesperson Abul Kalam told UNB, “After reforming the mutual fund and margin rules, the most challenging task was revising the IPO regulations. The commission finalised the rules and sent them to the relevant ministry within December. The new IPO rules will benefit the stock market in the long run.”

Even before the rules were finalised, the commission had been trying for over a year to bring quality companies to the market, but those efforts failed to materialise.

Despite multiple meetings aimed at listing state-owned enterprises and multinational companies, no major company entered the capital market, leading to growing frustration among investors.

Investor Sajjadul Islam said, “A single good company can turn the market around. But the commission has failed to bring even one. When companies like Square Pharma, Grameenphone or Robi entered the market, it helped revive investor confidence. Yet even after a year, this commission has not been able to bring any quality company.”

Another investor, Abul Hossain, said investors are eagerly waiting for good companies to be listed, but continued delays are pushing many to turn away from the market in disappointment.

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Explaining why no quality company could be listed in the past year, a senior BSEC official, speaking on condition of anonymity, said bureaucratic complexities have stalled progress.

“If these bureaucratic hurdles did not exist, it would have been possible to bring good state-owned companies to the market, even if multinational private companies remained reluctant,” the official said.

He said the commission made year-long efforts to directly list 18 state-owned companies. “Even with direct instructions from the Chief Adviser, these companies could not be listed due to delays and non-cooperation from the concerned ministry secretaries. Despite repeated meetings and requests, the issue was not taken seriously.”

Asked when new companies might enter the market under the revised rules, BSEC spokesperson Abul Kalam said the commission remains hopeful that quality companies will be listed within the current year.

Investors, however, have complained that after the commission assumed office, it cancelled a number of IPO applications that were already under process. As a result, merchant banks acting as issue managers have reportedly lost interest in submitting new IPO proposals.

“We did not rush to list bad companies,” Abul Kalam said, adding, “most of the IPOs approved by the previous commission were of poor-quality companies, which destabilised the market and increased manipulation. Our focus is on eliminating manipulation and ensuring that only good companies are listed.”

Meanwhile, DSE Brokers Association of Bangladesh (DBA) President Saiful Islam said that the likelihood of IPOs before the national election is low. Good companies will not be interested in listing unless good governance is restored in the capital market, he added.

“Let alone comparing Bangladesh with India, even compared to Pakistan and Sri Lanka, Bangladesh lags far behind in terms of market governance scores. Without addressing these issues, the capital market cannot return to normal,” he said.

Saiful said stability may return after the 13th national election and the formation of a new government, creating an opportunity to change the market scenario if quality companies are listed at that time.

Commission sources said that responsibility for managing IPOs of major companies as an issue manager was given solely to the state-owned Investment Corporation of Bangladesh (ICB), but the initiative did not yield results.

An inquiry found that ICB, once a profitable institution, is now struggling with heavy losses. In the 2024–25 fiscal year, ICB’s losses exceeded Tk 1200 crore. The institution is surviving on loans and has repeatedly sold shares to pay interest obligations.

ICB Chairman Professor Abu Ahmed, however, expressed optimism about a turnaround. “Despite many ups and downs, ICB has survived. In the past, its funds were invested in poor-quality IPOs linked to market manipulation, which caused significant losses.”

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“We are hopeful that good companies will be listed in the market soon. Alongside state-owned enterprises, multinational companies will also come to the market, which will change the overall scenario,” he added.

Market analysts say that while the new IPO rules have strengthened safeguards against manipulation, they have also made listing more challenging in some cases. Nevertheless, they believe the reforms will benefit the capital market in the long term.