Bangladesh's IPO Market in Crisis: Longest Drought in Decades

Strategic Insights -

Bangladesh's capital market is facing an unprecedented crisis, with the initial public offering (IPO) market remaining virtually inactive for over 18 months. Despite repeated instructions from Chief Adviser Muhammad Yunus to boost activity, no new company has gone public since March 2024. Market analysts warn that this is the longest IPO drought in decades, raising concerns about investor confidence and the future of equity financing in the country.

Key Takeaways:

  • The last company to go public in Bangladesh was Techno Drugs Limited, listed in early 2024, marking the beginning of the longest IPO drought in decades.
  • The Bangladesh Securities and Exchange Commission (BSEC) has not approved a single IPO since March 2024, with nearly a dozen pending applications cancelled under a "clean-up" initiative aimed at enhancing transparency.
  • Multinational companies have shown little interest in listing their shares, stating that their boards have taken "no decision" to raise funds from the stock market.
  • The government's plan to list 18 state-owned enterprises (SOEs) has made no visible progress, with bureaucratic delays cited as a major challenge.
  • The process of getting IPO approval in Bangladesh can take over two years, while in countries like India or Vietnam, it takes only six to eight months.
  • Regulatory uncertainty and unclear amendments to the Public Issue Rules have also discouraged companies from applying for IPOs.
  • The BSEC is finalising new Public Issue Rules aimed at simplifying the process and introducing a "green channel" system for companies with strong financials.
  • Former BSEC chairman Faruq Ahmad Siddiqi warned that without fresh listings, the market could "dry up" completely.

Statistics:

  • The IPO market has remained inactive for over 18 months, with no new company going public since March 2024.
  • 26 firms were listed by the previous caretaker government in 2007-08, compared to none so far under the current interim administration.
  • It can take over two years for a company to get IPO approval in Bangladesh, while the process takes only six to eight months in countries like India or Vietnam.
  • The Dhaka Stock Exchange (DSE) has welcomed the idea of simplifying the IPO process and introducing a "green channel" system.

Sources:

  • The New Nation. "Bangladesh's IPO Market in Crisis".
  • World Bank. "GDP growth rate of 4.8 percent in FY26".