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Startups Poised to Go Public Soon as BSEC Modernizes IPO Rules

Industry: Start-Up, Stock Market

Bangladeshi startups, previously unable to go public due to their scaling-up business models before profitability, will now be allowed to raise capital from the stock market under the new Public Issue Rules planned by the Bangladesh Securities and Exchange Commission (BSEC). The criteria for no accumulated losses and no net annual loss in the latest financial year will no longer apply to startups seeking an initial public offering (IPO). Startups with accumulated losses not exceeding 200% of their paid-up capital can pursue fixed-priced IPOs, while those without accumulated losses can opt for a book-building method despite past financial losses. To mitigate risk, only 10% of the primary shares will be available to the general public. Shares for eligible investors may have a three-year lock-in period, while pre-IPO alternative investment funds and foreign investors might face a one-year lock-in. This modernization reflects the evolving business models and dynamics of the past decade.

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