SMEs’ listing on DSE this year very unlikely
Image: Bizbangladesh.net
Listing of small and medium enterprises on the Dhaka Stock Exchange is very unlikely to start this year due to lack of preparations on the part of issue managers, issuers and the DSE.
Before completing all preparations, the DSE launched ‘DSE SME Platform’ on May 1 this year. Finance minister AHM Mustafa Kamal was present, among others, at the launching programme.
DSE officials said that some technical issues were yet to be resolved and the issue managers were just preparing financial statements of the interested companies.
They said the process might take another 2-3 months to be completed.
DSE officials expected that the issue managers might submit applications for SME listing at the end of this year.
The entire process of listing of the entities on the bourse may be completed by March in 2020, they said.
Earlier in January this year, the DSE had set target to enlist 20 SMEs in this year and 30 SMEs in the next year. Such listing would have enhanced the DSE market capitalisation to Tk 300 crore in 2019 and Tk 500 crore in 2020.
Market experts said the delay was the reflection of irrational business plan of the country’s premier bourse.
Lack of research-based activities hurts the capital market development, they said.
The bourse opened the platform to diversify the capital market and facilitate small-capitalised companies to expand their businesses.
Two companies — Krishibid Seed and Annex Suites — have entered into agreements with MTB Capital to raise total Tk 25 crore from the stock market through the newly introduced SME board. MTB Capital is the issue manager for both the companies.
Krishibid Seed will raise Tk 15 crore and Annex Suites Tk 10 crore at an offer price of Tk 10 each.
Scandex Knitwear, Index Laboratories and Giant Agro may raise funds through the SME board of the DSE.
According to DSE officials, only a qualified investor can submit their intention to subscribe the issue offered by the SMEs for fund raising.
The qualified investors are merchant bankers and portfolio managers, asset management companies, mutual funds and collective investment scheme, stock dealers, banks, financial institutions, insurance companies, alternative investment fund managers, alternative investment funds, market makers, issuer of listed securities, resident or non-resident Bangladeshi, individuals having minimum net worth of Tk 1 crore and other institutions as approved by the Bangladesh Securities and Exchange Commission.
Any public limited company is eligible to raise fund and get listed on the small capital platform. After listing on the platform, the company’s paid-up-capital must stand at least Tk 5 crore and below Tk 30 crore.
The minimum capital of a company willing to raise capital through the book-building system must be Tk 10 crore before its listing on the SME platform.
The BSEC has made rules for ‘qualified investor offer by small capital companies’ that also says that all ordinary shares of the company at the time of consent must be lock-in for one year.
In the case of the paid-up capital of a SME company crossing Tk 30 crore, a company must compulsorily apply for listing on the main board, the rules said.
The DSE estimated the total cost for the project at Tk 2.74 crore and Business Finance for the Poor in Bangladesh, a programme funded by the British government, provided the bourse Tk 1.37 crore.
Source: http://www.newagebd.net
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