BSEC plans tougher push to bring large firms to stock market

The Bangladesh Securities and Exchange Commission is preparing to use its statutory powers to push government-owned companies, multinational corporations and large private enterprises to list on the stock market, aiming to deepen market liquidity and reduce the economy's heavy reliance on bank financing.

Speaking at the IDLC Capital Markets Conclave 2026, organised by IDLC Investments Limited at a hotel in Dhaka today (10 October), BSEC Chairman Masud Khan said the securities regulator had clear legal authority to require any company or class of companies to go public.

He said the commission preferred voluntary participation but would closely monitor compliance and exercise its enforcement powers where necessary.

Several private sector representatives attended the event.

Directly addressing the widespread reluctance among large private conglomerates to go public, the BSEC chief warned that the current regulatory stance leaves no room for avoidance. 

Masud said the commission is undertaking structural reforms to streamline the initial public offering (IPO) process and address longstanding barriers to market entry.

The BSEC has restructured pre-submission verification procedures, placing direct accountability on statutory auditors to reduce delays in processing applications, he said.

The commission has also revised its valuation approach, moving away from institutional consensus requirements and traditional dividend discount models towards a price-discovery mechanism based on Dutch auction principles, according to Masud.

He argued that large companies could benefit from listing by gaining access to long-term capital and strengthening their prospects for expansion and succession planning. He cited multinational manufacturers such as Honda, Toyota, BMW and Mercedes-Benz, as well as regional business groups such as Tata and Lafarge, as examples of enterprises that evolved from family-run businesses into major corporations.

He also said greater reliance on transparent banking transactions and stricter tax oversight is making opaque financial practices increasingly difficult to sustain.

In parallel, market authorities are advancing reforms to activate the corporate bond market by shifting corporate debt instruments directly to the main board instead of the underutilised Alternative Trading Board. With approximately Tk3,500 crore in corporate bonds approved under strict main-board listing parameters, regulatory leaders project a vibrant debt market in the coming months. 

Concurrently, efforts are underway to reactivate Central Counterparty Bangladesh Limited to modernise settlement operations and pave the way for sophisticated instruments such as derivatives and short-selling.

Welcoming guests to the conclave, Jamal Uddin, CEO of IDLC Finance and chairman of IDLC Investments, underscored the strategic imperative of bringing established enterprises into the market to build an effective alternative for long-term corporate financing. 

He highlighted that while the banking sector remains an indispensable foundation for the economy, over-reliance on bank credit creates severe financing pressures that a robust equity market could alleviate. 

Echoing these views, Kazi Mahmood Sattar, chairman of IDLC Finance, stressed that the historical over-dependence on bank credit has revealed severe structural limitations, particularly as non-performing loans in the banking sector have escalated past 20%. 

He argued that expanding equity and bond markets is essential to relieve pressure on commercial banks during economic downturns, urging corporate entities and the government to utilise capital market instruments for large-scale long-term funding.

Detailed analytical perspectives were presented by Nazneen Ahmed, executive director at the Centre for Policy Dialogue, who stressed that restoring retail investor confidence hinges entirely on market transparency, strong governance, and the entry of reputable, high-performing enterprises.

She noted that general investors often retreat from equity markets due to unexplainable index volatility, making strict regulatory oversight and balanced financing structures essential for job creation and sustainable economic expansion.

Highlighting the practical hurdles faced by expanding businesses, Mesbah Uddin Ahmed, managing director at IDLC Investments, outlined four core challenges confronting scaled enterprises: excessive debt dependency, complex asset valuation and liquidity bottlenecks, difficult family-to-corporate leadership transitions, and high founder dependency. 

He explained that listing on the capital market resolves these operational barriers by providing permanent equity, separating ownership from professional management, and instilling high standards of accountability.

Analysing historical market dynamics, Dhaka Stock Exchange Chairman Mominul Islam remarked that the capital market remained disconnected from mainstream economic planning for decades due to past mismanagement and systemic inefficiencies. 

He pointed out that while leading institutions like Renata, ACI, Square, and Uttara Bank listed during earlier market phases, the rapid expansion of private sector banking in the 1990s made bank credit overly accessible, reducing the incentive for quality firms to list. "This shortage of quality scrips created space for weaker companies and market manipulation, driving institutional capital away," Mominul added. 

Addressing broader macroeconomic realities, Imam Abu Sayed, executive director (research) at the Bangladesh Bank, observed that while global institutions forecast GDP growth around 4%, the country holds an underlying potential exceeding 7%. 

With manufacturing accounting for nearly 25% of the economy, he noted that industrial growth has shown signs of saturation, requiring enhanced professional competence and international-standard licensing in financial deal-making. He added that inflation, currently around 9.5%, remains tightly linked to international market volatility in capital machinery and raw material imports.

Representing the real sector, MA Rahim, vice chairman of DBL Group, shared practical insights on corporate restructuring, highlighting his conglomerate's experience in managing generational succession of second-generation family members returning from abroad. 

Rahim urged regulators to fast-track approval timelines, eliminate double taxation burdens, and evaluate expanding companies on independent performance merits rather than rigid sector-wide averages.