NRB Bank, Protective Islami Life Insurance get waivers for IPO

Highlight: 

• From Tk100cr IPO fund, NRB Bank will invest Tk92cr in govt securities
• Its consolidated net interest income stood at Tk78.69cr from January to September 2022, up from Tk74.12cr a year ago
• From Tk15cr IPO fund, Protective Islami Life Insurance will invest Tk13.95cr in the capital market
• At the end of 2022, its fund rose 76% to Tk11.64cr, from Tk6.61cr in 2021

The Bangladesh Securities and Exchange Commission (BSEC) has granted an exemption to NRB Bank and Protective Islami Life Insurance, allowing them to proceed with their initial public offerings (IPOs).

Notably, both companies had augmented their paid-up capital by issuing shares in the two years leading up to their IPO filings.

This practice is in apparent contravention of the Public Issue Rules, which stipulate that a company cannot apply for an IPO if it increases its paid-up capital by issuing new shares within two preceding years.

In response to this deviation, the commission has imposed a condition wherein the shares issued within the two-year period before filing the IPO applications will be subject to a lock-in period of three years from the first trading day on stock exchanges.

This regulatory measure aims to balance the need for flexibility in capital expansion with the safeguarding of investor interests.

While the BSEC has already approved NRB Bank's IPO, Protective Islami Life's application is still pending.

NRB Bank raised Tk77.76 crore through the issuance of right shares in June 2021, while Protective Islami Life accumulated Tk4.50 crore in cash in December of the preceding year.

NRB Bank 

NRB Bank, a fourth-generation private sector lender, has received approval from the BSEC to raise Tk100 crore through an IPO. The bank will issue 10 crore ordinary shares through the fixed price method.

Mamoon Mahmood Shah, managing director of NRB Bank, told The Business Standard earlier, "We have obtained permission to raise the fund from the capital market during a challenging economic period in order to meet regulatory requirements. Our accountability will increase after we are listed and become more compliant."

Besides, the bank will be more capable regarding its stability and expected returns, he added.

Protective Islami Life Insurance

Protective Islami Life Insurance applied to raise Tk15 crore through an IPO under the fixed price method.

It will issue 1.5 crore ordinary shares with a face value of Tk10 apiece. The company said in its IPO prospectus that of the Tk15 crore, it will invest Tk13.95 crore in the capital market, including government treasury bonds and fixed deposit receipts.

Also, it will issue 22.5 lakh ordinary shares to its employees, which the BSEC has already approved. These shares will be locked in as per the public issue rules of the commission.

According to the prospectus, at the end of 2022, the life insurance fund of the company rose 76% to Tk11.64 crore, from Tk6.61 crore in 2021.

The total assets of the company grew to Tk37.53 crore from Tk29.53 crore in the previous year, while liabilities have come down 31% to Tk3.39 crore in 2022.

Its net premium has increased to Tk46.71 crore from Tk40.64 crore in the previous year.

At the end of 2022, the company had settled Tk24 crore of claims, up from Tk23.36 crore in 2021.