Company fattening attempts targeting manipulative initial public offering (IPO) schemes is set to be discouraged as the securities regulator has taken initiatives for some long sought-after reforms. Moreover, no company can apply for stock listing if its existing capital accumulated through private placements exceeds 15% of the amount it plans to raise from the public during the listing. Currently, there is no such restriction.
Currently, in fixed-price IPOs, where a company offers its primary shares at a face value, it must offer at least 10% of its post-IPO shares or Tk30 crore, whichever is higher. The minimum floating threshold may be increased up to 30%, depending on how much capital a company is planning to raise through book-building IPOs.
Source: The Business Standard, 13-01-2021