23,210 investors with shares worth BDT 10 million or more found eligible for SME IPO subscription


The government issued rules for qualified investor offer by small capitalized companies on January 30 to give a chance of raising fund from the capital market for the small public limited companies. Bangladesh Security Zone Exchange Commission had declared 23,210 BO accountholders as eligible investors for the subscription of IPOs of SMEs.


SME (small-to-medium enterprise) is a convenient term for segmenting businesses and other organizations. SMEIPO is an Initial Public Offering (IPO) that is meant for the trading of shares in small and medium companies.

According to Bangladesh Security Zone Exchange Commission Rules 2016 R 2(f) ,“qualified investor or QI” means the investors qualified and competent to understand the risk & return potentials to invest and commit capital to any small capital company who has business operation/ investment in Bangladesh. According to the rules, individuals having the minimum net worth of Tk 1 crore are also the qualified investors along with the other qualified investors for IPO subscription of SMEs.

Other qualified Investors are Merchant Bankers and Portfolio Managers; Asset Management Companies; Mutual Funds & CIS; Stock Dealers; Market Makers;  Banks; Financial Institutions;  Insurance Companies; Alternative Investment Fund Managers; Alternative Investment Funds; Recognized Pension Funds and Provident Funds; Issuer of other listed securities; (Other than holding, subsidiary or associate company of the issuer) , Any other Institution as approved by the Commission; Resident or non-resident Bangladeshi “high net worth individual” or “HNI andForeign Investors who have portfolio investments in capital market of Bangladesh through any Securities Custodian registered with the Commission.

According to the collected data of Central Depository Bangladesh Limited submitted to BSEC ,there are 8,800 BO accounts(account to hold shares, used for stock trading and investing in the stock market in Bangladesh) with shares worth Tk 1-2 crore, 4,800 accounts with Tk 2-3 crore, 3,410 accounts with Tk 3-4 crore, 2,700 accounts with Tk 4-5 crore, 2,250 accounts with Tk 5-10 crore and 1,250 accounts with shares worth above Tk 10 crore.  BSEC officials has expressed that investors found it lucrative to invest in the capital market.

However, although there are also 26.45 lakhs BO accounts in the market, 50 per cent of them have no role in the country’s capital as they have either ‘zero balance’ or ‘never’ been used for trading , according to CDBL officials.

The CDBL will examine the accounts of  23,210  accountholders  five day before the subscription of SMEs’ IPOs to see the if those meet the standard or goes above, said BSEC Executive director and Spokesperson Rezaulkarim.

These accounts were checked before the approval of the country’s first SME-IPO in favor of Nialco Alloys Limited by BSEC. The offer began on 16th May until 20th May on the fixed-price method under the electronic subscription system. The IPO of the company was oversubscribed by to Tk 134.39 crore against QIO of Tk 7.5 crore.

Four other companies are expected to be on the bourses’ SME platform soon. Oryza Agro Industries will raise Tk 10 crore, Master Feed Agrotec Limited Tk 10 crore, Subra Systems Limited Tk 12 crore and Mostafa Metal Industries Limited Tk 11 crore through qualified investor offers.

Source : The New Age

Picture from: Shuttershock


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