10 firms to raise Tk120cr from small-cap platform

Ten private companies have sought approval of the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk120 crore from the small-cap platforms of stock exchanges.

Mostafa Metal Industries will raise Tk11 crore, Subra Systems Tk12 crore, Krishibid Feed Tk22 crore, and Achia Sea Foods Tk15 crore with qualified investors offers (QIOs).

Besides, Master Feed Agrotec, Oryza Agro Industries, Mamun Agro Products, Agro Organica, BD Paints, and Bonita Accessories want to raise Tk10 crore each by using the same method.

Subra Systems, Krishibid Feed, Achia Sea Foods, Master Feed Agrotec, BD Paints, and Bonita Accessories had earlier wanted to raise funds with an initial public offering (IPO) but they failed.

Then they applied to the commission for QIO to get relaxation in relevant rules.

BSEC has recently decided to relax rules on QIO to allow companies with more than Tk30 crore paid-up capital to enter the small capital board.

The small-cap platform was formed in 2019 to attract businesses with a small capital base to the stock market.

With a view to making the small-cap board active, the commission now wants to get some companies listed on the board within this financial year.

BSEC has already allowed Nialco Alloys Limited to raise Tk7.5 crore from the small-cap platform of the Chittagong Stock Exchange.

Issue managers are not very much interested in bringing in small-cap companies to the market as they pay low fees, sources said.

According to them, rules for small-cap companies should be short and simple. Small entrepreneurs are not as capable as listed companies to comply with all of these rules.

In November 2018, BSEC gave its final approval to the Bangladesh Securities and Exchange Commission (Qualified Investor Offer by Small Capital Companies) Rules 2018 with some changes and amendments.