BSEC Urges Firms For Fast Utilisation Of IPO Funds

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BSEC Urges Firms For Fast Utilisation Of IPO Funds

The BSEC, Bangladesh’s securities regulator is urging for fast utilisation of the initial public offering (IPO) funds of the newly listed companies that extended their utilisation deadlines because of the pandemic. The Bangladesh Securities and Exchange Commission (BSEC) is looking into the IPO proceeds utilisation reports of the companies and has issued letters to two of them in this regard. The Commission had relaxed utilisation of IPO funds, due to the pandemic, while some companies could not import machinery due to the pandemic. “But with the Covid situation normalising, there is no scope to further delay the IPO fund utilisations, and the commission may set a stipulated timeframe for the same, BSEC officials said. The commission is also trying to find out why entrepreneurs delay using the IPO funds, he further said. In August 2018, Aman Cotton Fibrous collected Tk 80 crore from the share market to buy new machinery and repay loans. But the company has only repaid its loans so far and is yet to set up new machinery for business expansion. Alif Manufacturing raised Tk 109.4 crore by issuing rights shares in 2018, but it is yet to use the fund. New Line Clothings, Kattali Textile, and others are also lagging in IPO fund utilisation despite securing approval from their shareholders and the regulators. Market insiders said many companies enter the capital market showing high hopes but they deviate from their commitments after raising the fund and thus disappoint their investors.