The Bangladesh Securities and Exchange Commission (BSEC) has moved to make it easier for established companies to enter the stock market without raising fresh capital, seeking to attract strong private businesses that have so far been reluctant to list.
The commission has issued a press release encouraging companies to consider direct listing and published the draft Bangladesh Securities and Exchange Commission (Direct Listing of Securities on the Stock Exchange) Rules, 2026 for stakeholder comments.
The proposed mechanism targets companies that do not need new funds for business expansion or debt repayment but whose existing shareholders want to sell part of their holdings to the public.
Tanzim Alamgir, managing director and CEO of UCB Investment Limited, said the initiative could help bring high-performing private companies to the stock exchanges that have little incentive to raise funds through conventional initial public offerings (IPOs).
“The main goal is to attract high-performing private companies that have been hesitant to list on the exchanges,” he told Daily Waadaa in a telephone interview.
Tanzim said the existing IPO framework limits the amount companies can use from IPO proceeds to repay existing debt, while the remaining funds must be used for business expansion.
As a result, established companies that neither need substantial expansion financing nor require funds to repay debt often see little reason to go public, he said.
“Well-established companies that don't need additional capital for expansion or debt payoff simply avoid coming to the market, claiming they have no need for public funds,” Tanzim said.
Under a direct listing, however, the company would not raise new money. Instead, existing shareholders could sell a portion of their holdings to the public.
“Under direct listing, the company itself doesn't raise new capital; instead, existing shareholders can offload a portion of their holdings – around 20%, depending on the company – to the public,” he said.
Tanzim said some large companies were already interested in such a route. However, established companies, particularly multinational corporations, generally have less immediate need for public funding, making voluntary listing difficult.
He said direct listing could provide an alternative route for such companies, while a conventional IPO would remain more appropriate for businesses that need fresh capital.
“If a business requires expansion funds or liquidity, a standard IPO is still the right vehicle, because direct listing does not bring capital directly into the company's balance sheet,” he said.
Tanzim said the regulator could eventually consider mandatory listing requirements if voluntary participation remained limited.
“If these companies still refrain after direct listing options are made available, the regulator may eventually issue mandatory directives,” he said, referring to a position that the BSEC chairman has also highlighted.
He, however, said forcing companies to list was not necessarily the preferred approach.
“Forcing companies into listing is rarely the ideal solution,” Tanzim said, adding that voluntary compliance would be preferable if the market framework and rules were structured properly.
He also pointed to a structural complication involving foreign financial institutions operating in Bangladesh. Some, including Standard Chartered, operate through branch offices rather than locally incorporated entities, creating different considerations for their possible listing.
The BSEC said the proposed direct-listing framework could help expand the shareholder base, give existing shareholders an opportunity to sell their shares and increase public participation in the capital market.
The commission has invited stakeholders to submit their comments on the draft rules before taking further steps.