Govt lifts 16-year ban on direct listing

The Ministry of Finance has lifted a 16-year-old restriction on direct listing, allowing multinational, state-owned and high-value private companies to list on local stock exchanges without issuing an initial public offering (IPO).

According to a ministry order issued today (5 October), the government revoked a circular issued on 1 February 2010 that prohibited direct listing of state-owned, private and foreign companies.

The decision came after the Bangladesh Securities and Exchange Commission (BSEC) recommended on 19 August 2026 that the restriction be withdrawn to support the sustainable development of the capital market.

Infographic: TBS

The move removes a long-standing regulatory barrier to direct listing by private-sector companies, potentially expanding the range of companies eligible to raise capital through the stock exchanges.

In December 2016, the BSEC had instructed the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) to suspend provisions allowing the direct listing of unlisted securities of non-governmental companies.

As a result, the direct-listing mechanism became largely limited to state-owned enterprises.

The restriction followed controversy over earlier direct listings, particularly sharp share-price volatility and substantial capital gains made by existing promoters after the companies were listed.

The latest decision is expected to reopen the direct-listing route for eligible private and foreign companies, subject to applicable listing and regulatory requirements.

Under the new regulatory push, Bangladesh is set to revive direct listing for large, established enterprises after a 16-year hiatus. In early September 2026, the BSEC approved draft rules titled the "Bangladesh Securities and Exchange Commission (Direct Listing of Securities by Stock Exchange) Rules, 2026" for public consultation.

Under the proposed framework, qualified entities will be permitted to list their shares on the main board by offloading 10% to 20% of existing shareholders' holdings on the secondary market, rather than raising new capital through conventional IPOs. This alternative entry pathway aims to entice top-tier corporate names to go public while offering institutional and founding shareholders a structured exit mechanism.

However, the regulator has emphasised that the facility will remain tightly guarded to prevent past abuses, restricting eligibility strictly to large, strategically important firms meeting stringent thresholds. Eligible entities include government-owned or majority-held companies, firms where the government holds at least 10% paid-up capital, and foreign-owned or multinational corporations.

Additionally, telecommunications and ICT infrastructure providers approved by the BTRC with a minimum paid-up capital of Tk300 crore will qualify. Scheduled banks, non-bank financial institutions, and insurance companies boasting a minimum three-year operational track record can also seek direct listing. 

Furthermore, general private corporations holding annual turnover or total assets of at least Tk500 crore will be eligible, subject to satisfying exchange and central depository compliance rules.

Direct listing was first introduced in Bangladesh under a 2006 framework, through which major state-owned power and energy giants including DESCO, Power Grid Company of Bangladesh, Jamuna Oil, Meghna Petroleum, and Titas Gas successfully tapped the market. Private firms like ACI Formulations, Shinepukur Ceramics, and Navana CNG also entered the bourse via direct listing during that era.

However, aggressive price discovery and trading anomalies, most notably surrounding Navana CNG's listing in 2009, triggered regulatory investigations, prompting authorities to impose severe restrictions in 2010. Controversies resurfaced in 2020 over Best Holdings' attempted direct listing on the DSE.

By lifting the 2010 restriction and replacing it with the comprehensive 2026 framework, regulators aim to replace old loopholes with clear eligibility standards, offering blue-chip multinationals and large domestic conglomerates a fast-track route to the capital market.