Merchant banks in Bangladesh are calling for a review of public issue rules to attract well-performing businesses to the capital market. The Bangladesh Merchant Bankers Association (BMBA) has proposed changes, including revising the book-building method for IPO pricing, increasing IPO share allocation for eligible investors from 25% to 50%, and allowing private and multinational companies to directly list on stock exchanges. They also suggest roadshows occur after IPO approval and propose lifting exemptions for non-listed companies raising capital through private placements to regulate capital collection better. The BMBA argues the current system discourages reputable firms, with no strong-performing companies going public since the 2021 rule changes. They highlight that the capital market has not grown in size relative to GDP due to its failure to become a source of long-term financing. The BMBA also recommends digitalization of regulatory bodies for easier document verification and setting a maximum 90-day period for IPO processing to encourage more companies to list.
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