Sarwar A Chowdhury
Public limited companies (PLCs) with a paid-up capital of Tk 50 crore or more will have to go for initial public offerings (IPOs), a move to increase the supply of quality shares to the market.
The PLCs will have to apply for IPOs within one year of reaching or exceeding Tk 50 crore in the paid-up capital, according to a notification issued by the Securities and Exchange Commission (SEC) on June 1.
However, if their paid-up capital reached or exceeded before the issuance of the notification, they will have to apply for IPOs within one year after the notification date.
The companies will have to be in operation for at least three years, and this timeframe will be counted from the date of incorporation from the tax authorities.
A PLC is entitled to have the number of shareholders from seven to unlimited.
In case of failure, the SEC will take action against them.
Earlier, if a PLC with Tk 50 crore in paid-up capital intended to raise its capital base, it had to offer primary shares valued at least one third of the added paid-up capital.
The SEC said it amended the provision in a bid to increase the supply of quality shares to the market.
"There are many big and profitable companies that are yet to be listed with the stock exchanges, and every company needs capital to run the operation. The commission took the initiative so the companies raise the necessary capital from the market," said Ziaul Haque Khondker, chairman of SEC.
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