BSEC now limits Best Holdings IPO subscriptions
In a letter to the company on Tuesday, the commission said, “The subscribed limit for the application amount is Tk10,000 or its multiples, but not exceeding Tk15 lakh.”
The Bangladesh Securities and Exchange Commission (BSEC) has imposed limits on general investors on receiving allotments of initial public offering (IPO) shares of Best Holdings, the owner of the five-star-ranked hotel Le Méridien.
In a letter to the company on Tuesday, the commission said, "The subscribed limit for the application amount is Tk10,000 or its multiples, but not exceeding Tk15 lakh."
On 13 December last year, the regulator lifted the bar on IPO applications by general investors for Best Holdings.
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Owing to such a decision, investors could apply for shares without any value restrictions, as the regulator has removed the standard Tk10,000 cap typically imposed on IPO applications.
After the change in IPO applications on 30 December 2023, the Dhaka Stock Exchange (DSE) conducted an awareness programme with the representatives of brokerage houses and instructed them to follow the new guidelines.
After this direction of the commission, there were mixed reactions among the general investors, because those who applied more were entitled to get more shares of Best Holdings.
So, now with the new decision, an investor against a single beneficiary owner's (BO) account can now apply up to a maximum of Tk15 lakh, which will start at Tk10,000 for subscribing to Best Holdings' shares.
According to BSEC, an investor who is eager to apply for an IPO in the primary market needs to have a minimum investment of Tk50,000 in the secondary market.
In October 2023, Best Holdings got BSEC approval to raise Tk350 crore through an IPO under the book-building method from the capital market.
The IPO subscription will start on 14 January 2024, and continue until 18 January.
To apply for the company's IPO shares, Bangladeshi resident general investors will need to have a minimum Tk50,000 investment in matured listed securities and non-resident Bangladeshis (NRBs) Tk1 lakh as on 3 January 2024.
Earlier, the electronic bidding for the company's shares took place between 20 November and 23 November, where the cut-off price of the shares was fixed at Tk35 each.
Qualified and institutional investors, including mutual funds, will buy 25% of the company's shares at the cut-off price.
Individual investors will be able to buy the remaining shares at a 30% discounted price of Tk24 each.
According to the company, Best Holdings will use 50% of the fund, or Tk176 crore, for building construction and other civil works, 33%, or Tk115.6 crore, for repayment of existing liabilities, and around 13% for local machinery and equipment acquisition.
