Star Business Report
The stockmarket regulator has rejected PHP Power Generation Plant’s appeal for a waiver of conditions for an initial public offering (IPO) under the book building method.
PHP Power is a concern of a Chittagong-based PHP Group.
The book building rules state that a company can offload shares worth an amount equivalent to at least 10 percent of its paid-up capital.
PHP Power's existing paid-up capital structure and its proposed IPO size do not fulfil the condition.
"The commission has rejected PHP's appeal for a waiver," said a senior official of the Securities and Exchange Commission.
"However, it doesn't mean PHP cannot go for IPO. The opportunity is still there with fixed price IPO system. Even the company can proceed for IPO under book building method, if it can fulfil the requirement through raising the paid-up capital first," he said.
The official added that PHP could also seek premium with the fixed price IPO system.
PHP Power's existing paid-up capital is Tk 9 crore, and it has Tk 18 crore in reserve, which, the company told the SEC, will be added to the paid-up capital. It means the paid-up capital will be Tk 27 crore.
But according to book building rules, a company having below Tk 30 crore in paid-up capital is not allowed to go for IPO using the book building method, a modern pricing mechanism.
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