Legal Framework for Public Offerings
Statutory Eligibility Criteria
Under the Public Issue Rules, an issuer must meet specific financial thresholds and corporate governance standards before approaching the Bangladesh Securities and Exchange Commission (BSEC).
| Requirement | Statutory Threshold | Regulatory Reference |
|---|---|---|
| Paid-up Capital (Post-IPO) | Minimum BDT 300 Million | Public Issue Rules 2015, R. 3(1) |
| Net Profit History | Positive Net Profit for last 2 years | Public Issue Rules 2015, R. 3(4) |
| Asset Valuation | No revaluation for IPO purposes | Public Issue Rules 2015, R. 3(5) |
| Debt-Equity Ratio | Reasonable as per BSEC standards | BSEC Guidelines |
The IPO Process Roadmap
Procedural Steps for Listing
- Conversion of Company: If the entity is private, it must be converted to a Public Limited Company under Section 231 of the Companies Act, 1994.
- Appointment of Issue Manager: The issuer must appoint a merchant banker registered with BSEC to act as the Manager to the Issue.
- Draft Prospectus Preparation: Preparation of the prospectus in accordance with Rule 4 of the Public Issue Rules 2015, ensuring full disclosure of risks and financials.
- Application to BSEC: Submission of the formal application for consent to issue capital under the Securities and Exchange Ordinance, 1969.
- Subscription and Allocation: Upon BSEC approval, the public subscription opens. Allotment is conducted via the Pro-rata basis as per BSEC directives.
- Listing with Exchanges: Final application for listing on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) under their respective Listing Regulations, 2015.
Consult Barrister Liton Asaduzzaman Sarkar
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Schedule a ConsultationFrequently Asked Questions
What is the minimum paid-up capital required for a public listing in Bangladesh?
According to Rule 3(1)(c) of the Securities and Exchange Commission (Public Issue) Rules, 2015, an issuer must have a minimum paid-up capital of BDT 300 million (30 Crore) after the proposed public issue.
Can a company with revalued assets apply for an IPO?
Under Rule 3(5) of the Public Issue Rules 2015, a company cannot issue shares for the purpose of an IPO based on the revaluation of its assets unless such revaluation was conducted at least two years prior to the application and meets specific BSEC criteria.
What is the lock-in period for sponsors and directors?
Pursuant to Rule 10 of the Public Issue Rules 2015, shares held by sponsors and directors are subject to a lock-in period of 3 years from the first day of trading, ensuring long-term commitment to the company.
◆ Related Statutory Guides & Practice Insights
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