BSEC calls for stronger merchant banker role to break IPO drought

Amid a prolonged drought in initial public offerings (IPO), the Bangladesh Securities and Exchange Commission (BSEC), the capital market regulator, has sought stronger participation from merchant bankers in accelerating new company listings on the stock market.

In a courtesy meeting with the newly formed committee of the Bangladesh Merchant Bankers Association (BMBA), the regulator assured issue managers of all-out support in facilitating company listings, citing that the commission is now fully prepared to approve IPOs as the new rules are already in effect with several major changes.

Bangladesh's capital market has seen no new IPO approvals over the past year, as companies remained reluctant to go public amid regulatory amendments, economic headwinds and political uncertainty. 

According to BSEC data, the last company to receive IPO approval was Techno Drugs on 7 March 2024, which raised Tk100 crore and began trading four months later. Since then, no new IPO has been approved.

The meeting between the regulator and issue managers was attended by BSEC Chairman Khondoker Rashed Maqsood, all commissioners, and members of the BMBA executive committee, including President Iftekhar Alam and General Secretary Sumit Poddar, according to a press release.

Maqsood said, "One of the key responsibilities of merchant bankers is issue management, underwriting, and portfolio management. With the amendment of IPO rules, the opportunities and potential for bringing quality new companies to the capital market have increased manifold."

He said the commission expects the BMBA and its member issue managers to work toward bringing good companies to the capital market. In this regard, the BSEC will always maintain a positive approach and provide all necessary support to ensure the listing of quality companies."

The BSEC chairman also emphasised the importance of enhancing the capabilities of merchant banks in capital formation, portfolio management, and corporate advisory services. He noted that improving the competence, efficiency, and ethics of merchant banks would attract greater interest and participation in the capital market from investors and all other market participants.

A member of BMBA's new committee said, "The commission assured us of all-out support to bring new companies to the capital market and break the long-standing IPO dry spell."

EBL Securities, in its yearly review, noted that the primary market remained frozen in 2025 for over 1.5 years – an unprecedented and the longest dry spell in recent times.

Cancellation of pending IPOs, delays in proposed amendments to the Public Issue Rules, and market uncertainties amid prevailing political conditions have stalled primary market operations, adding further strain to investor sentiment during an already prolonged period of market downturn, it noted.