IPO subscription ought to be sure-shot at shares
Every original public offering applicant should get shares if they have a minimum secondary market investment of Tk 10,000, said an IPO assessment committee formed by the Bangladesh Securities and Exchange Commission (BSEC) the other day.
It thinks every BO account-holder should help to make subscriptions of at least Tk 10,000 in the fixed-value method and Tk 20,000 in the book-building method.
Currently, investors offer up Tk 5,000 if they sign up to an IPO. A lottery is certainly held with winners getting a set amount of shares. Those whose names do not arrive up get the whole of their offer returned with their BO accounts.
The seven-member committee was formed to recommend how every applicant could easily get shares from IPOs. It sat in a gathering on Sunday when the opinions arrived up. IPO's shares should be divided amongst all of the subscriptions, eliminating lotteries, a committee member informed The Daily Star.
Whatever a subscription eventually ends up getting should be deducted from the subscription offer, and the rest should be returned to the investor, he explained.
The committee also thinks that the duration from an IPO offer to the debut trading time should be reduced from 45 days to thirty days.
"We will submit the suggestions to the commission and it will finalise the task and give approval," he said.
Stock investors weren't happy about the upcoming recommendation about raising the subscription give, saying the change would reduce investors' participation found in the primary market.
"If the recommendation is accepted, we will need to invest plenty of funds to get primary shares. Consequently, the commission should carry out further analysis about the subscription money," said inventory investor Abdul Mannan.
However, ensuring primary talk about for every applicant is an effective initiative, he said. "This intended every investor would reach least some major shares."
There are a lot more than 25.33 lakh beneficiary owners accounts, in line with the Central Depository of Bangladesh.
The brand new IPO process will benefit real stock investors since it gives them primary shares for certain, said a high merchant banker.
But with the subscription give doubling or more, it might reduce liquidity in the secondary industry, he said.
