Speakers at a seminar on Monday urged authorities concerned to ease the approval process of IPOs (Initial Public Offerings) with a view to encouraging people to use capital market for long term financing.
According to them, banks and capital market are two major sources of collecting funds, but the capital market is yet to gain popularity due to the regulatory flaws. If functions smoothly the capital market, they said, can play a pivotal role in boosting up industrialization.The discussants made the comments at a seminar on ‘Role of IPO in Industrialisation’, organised by a business news portal -- Businesshour24.com -- at a city hotel on Monday.
Bangladesh Securities and Exchange Commission (BSEC) former chairman AB Mirza Azizul Islam attended the programme as the chief guest while another former BSEC chairman Faruk Ahmed Siddiqi, former deputy governor of Bangladesh Bank Khandker Ibrahim Khaled, BSEC commissioner Swapon Kumar Bala, Dhaka University professor Dr Mahmud Osman Imam, Bangladesh Merchant Bankers Association (BMBA) first vice-president Mohammad Ahsan Ullah and news portal Businesshour24.com adviser Akter Hossain Sannamat also spoke on the occasion.
Speaking on the occasion, AB Mirza Azizul Islam said that companies usually raise funds from capital market while they go for expansion or boosting up their manufacturing capacity. “But, private investment in our country remains stuck which is a big challenge. If investment from private sector does not scale up, we cannot expect much from the capital market”, he also pointed out.
The former BSEC chairman also observed that the number of merchant banks is quite higher in Bangladesh which is now 58. “And these merchant banks will have to give due diligence alongside submitting IPO files”, he said.
Another former BSEC chairman Faruk Ahmed Siddique said that companies with good fundamentals are not coming to capital market due to the lengthy process of IPO approval. Stressing the need for easing the process, he said that no dynamic company will wait around two years for raising funds as they have alternative financing option. Criticising the lengthy process of IPO approval, BMBA first vice-president Mohammad Ahsan said that it takes around 1.5-2 years on an average for an IPO approval whereas it takes only around 90 days in neighboring India.
BSEC commissioner Swapon Kumar Bala said that the number of applications for IPO is very poor and merchant banks can play an effective role in bringing good companies IPOs. Chief Reporter of satellite channel Gazi Tv Razu Ahmed presented the key note paper at the seminar.