4 firms to join small cap board on relaxed rules

Highlights:

• 4 firms will apply to get listed on the SME platform
• The BSEC waived rules for making the small capital board more active
• Issue managers are not interested in small capital companies
• Small entrepreneurs are not as much capable to comply with rules

The securities regulator has exempted four firms from the rules regarding the qualified investors offer (QIO) to enlist them on the small capital boards of the bourses.

The four companies that will be listed on the small capital board are Master Feed Agrotec, Subra Systems Ltd, Oryza Agro Industries Limited and Mostafa Metal Industries.

Mohammad Rezaul Karim, executive director of the Bangladesh Securities and Exchange Commission, said the regulator has decided to relax the rules for the four companies but has not issued any letter in this regard yet.

Earlier, Master Feed Agrotec applied to the commission to raise Tk30 crore through an initial public offering (IPO) but failed. Its paid-up capital is Tk57.15 crore.

The company now wants to raise Tk10 crore through QIO. Manufacturing and marketing poultry, fish and cattle feeds are the main activities of the company. It is also engaged in poultry and fish farming.

Subra Systems' paid-up capital is Tk50 crore. Earlier, it applied for Tk30 crore IPO, but now the company wants to raise Tk15 crore through QIO.

The principal activities of the company relate to providing a comprehensive integrated business software solution.

Oryza Agro applied for Tk25 crore IPO, its paid-up capital being Tk59.08 crore. The company now wants to raise Tk10 crore through QIO.

The principal activities of the company are manufacturing and marketing fish and poultry feed.

Mostafa Metal Industries Limited is a concern of the conglomerate Mustafa group. The company wants to raise Tk11 crore through QIO.

The company produces a wide range of products maximising the use of timber substitute.

The small-cap platform was formed in 2019 to attract businesses with a small capital base to the stock market.  With a view to making the small capital board active, the commission wants to enlist some companies on the board within this financial year.

Companies whose paid-up capital is above Tk30 crore but are not able to go for an IPO can apply to be listed with the small capital board and get a waiver of rules in this regard, according to the commission.

Issue managers are not interested in bringing small capital companies to the market as they pay low fees, sources have said.

According to them, rules for the small capital companies should be short and simple. Small entrepreneurs are not as capable as listed companies to comply with all of these rules.

Meanwhile, the regulator has approved the QIO proposal of Nialco Alloys Ltd to raise Tk7.5 crore by issuing 75 lakh shares from eligible investors on the SME platform of the stock exchanges.

This is the first company in the small-cap platform that has been approved by the commission two years into its journey.