Capital Market Faces Complete Drying Up of New Share Supply

Economic Desk | April 24, 2025

The country’s capital market has seen a complete halt in initial public offerings (IPOs). Notably, no company has been allowed to go public in the last eight months. This situation has led to a severe crisis of confidence in the Bangladesh Securities and Exchange Commission (BSEC) under the leadership of Khondaker Rashed Maksud.

Industry insiders say the commission’s incompetence has been evident from the beginning. Market participants have lost trust in the regulator, with investors nationwide criticizing the current commission as unfit and lacking understanding of the stock market. They argue the commission fails to grasp the importance of IPOs, a sentiment shared by issue managers and entrepreneurs, who have consequently lost interest in listing.

The distrust is not limited to market participants—even BSEC officials reportedly question the leadership’s competence.

At a press conference, the BSEC Welfare Association stated that due to a lack of confidence in Chairman Khondaker Rashed Maksud’s leadership, no fundamentally strong company has shown interest in entering the market in the past eight months, leaving the market stagnant. The current commission appears more inclined to reject IPOs than approve them.

A BSEC member, speaking anonymously, told BD Digest that Maksud’s commission seems eager to cancel IPOs rather than facilitate them. When the commission took charge, 17 IPO applications were pending—all of which were rejected without proper justification. Additionally, the commission scrapped the IPO of a life insurance company citing legal constraints.

The DSE Brokers Association recently highlighted at a press conference that no IPO applications have been pending at BSEC for eight months—an unprecedented situation globally—indicating extremely poor supply in the market.

Analysis shows that no IPOs have been launched since August 5 last year. In 2024, only four companies raised capital through IPOs, matching the number in 2023—marking the lowest IPO activity in recent memory.

Analysts describe this as a market “without IPOs,” stressing that quality companies must be encouraged to list. However, policy issues and distrust in Maksud’s leadership have further dampened interest.

Statistics reveal that under former BSEC Chairman Prof. Shibli Rubayat-Ul Islam, the market saw record IPO fundraising in 2020 and 2021. However, IPO numbers declined in 2022 and plummeted in 2023 and 2024.

Since Maksud took charge, IPO activity has dropped to zero. In 2024, only four companies—NRB Bank, Best Holdings, Asiatic Laboratories, and Techno Drugs—raised Tk 645 crore through IPOs. In 2023, three companies and one mutual fund raised Tk 202 crore, while six companies raised Tk 626.26 crore in 2022.

The contrast is stark compared to 2021, when 15 companies raised Tk 1,858.44 crore, including Beximco Green Sukuk’s Tk 425.79 crore. The last two years have been particularly disappointing in terms of IPO activity.

Experts warn that the market cannot survive without IPOs and urge immediate policy interventions, including incentives for quality listings.