Direct listing asset threshold for private firms raised to Tk1,000cr

The Bangladesh Securities and Exchange Commission (BSEC) is set to double the minimum turnover or asset threshold for private companies seeking direct listing on the capital market to Tk1,000 crore, tightening eligibility rules to prevent market misuse.

Speaking at events marking World Investors Week, BSEC Chairman Masud Khan revealed that following public feedback on the draft regulation, the commission decided to raise the threshold from the previously proposed Tk500 crore. The finalised regulations are expected to be approved within this week.

Explaining the rationale behind the tougher entry barriers, the regulatory chief noted that Bangladesh's past experience with direct listing highlighted significant vulnerabilities that require safeguards. By establishing a higher financial bar, the regulator aims to ensure that only financially robust and institutionalised private enterprises utilise the shortcut to the main board.

While private sector firms will face the elevated Tk1,000 crore requirement, state-owned enterprises, multinational corporations, banks, non-bank financial institutions, and insurance companies will operate under tailored framework criteria. Telecommunications and ICT infrastructure providers licensed by the BTRC with a minimum paid-up capital of Tk300 crore will also qualify.

Earlier, on 5 October, the finance ministry lifted a 16-year restriction on direct listings, revoking a 2010 circular that prohibited private, state-owned and foreign enterprises from using the route, following formal recommendations from the BSEC.

Under the proposed "Bangladesh Securities and Exchange Commission (Direct Listing of Securities by Stock Exchange) Rules, 2026," eligible companies will be allowed to join the main board by offloading 10% to 20% of existing shares on the secondary market, bypassing the traditional initial public offering (IPO) process and capital raise.

Direct listing was initially introduced in 2006, paving the way for state-owned energy giants like Desco, Power Grid, Jamuna Oil, and Titas Gas, alongside private entities such as ACI Formulations and Navana CNG, to tap the stock market. 

However, aggressive price discovery and trading volatility – most notably surrounding Navana CNG in 2009 – prompted regulators to shut down the pathway in 2010. Fresh controversies resurfaced in 2020 during Best Holdings' attempt to seek direct listing on the Dhaka Stock Exchange.

By raising the eligibility bar for private firms, BSEC aims to prevent the recurrence of trading anomalies while offering large, top-tier corporate names a streamlined avenue to go public.