Business News

Move To Stop Private Placement Trickery

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