BSEC set to raise direct listing asset threshold for private firms to Tk1,000cr
BSEC Set to Raise Direct Listing Threshold for Large Private Firms
Bdbusinessdaily.com – BSEC set to raise direct listing eligibility standards for private companies in Bangladesh, proposing that applicants hold annual turnover or assets of at least Tk1,000 crore. The Bangladesh Securities and Exchange Commission plans to reopen a capital-market route that has remained largely unavailable for more than a decade, but with tighter safeguards for investors.
The proposed Tk1,000 crore benchmark is twice the Tk500 crore requirement included in the initial draft. BSEC Chairman Masud Khan said the revision followed feedback on the proposed rules during programmes marking World Investors Week. The commission was expected to approve the final regulations within the week.
A Controlled Alternative to an IPO
Under the proposed Bangladesh Securities and Exchange Commission (Direct Listing of Securities by Stock Exchange) Rules, 2026, an eligible company could join the main board without taking the conventional initial public offering route. Rather than issuing fresh shares to raise new capital, it would make 10% to 20% of its existing shares available for trading on the secondary market.
This is a key difference between a direct listing and an IPO. An IPO generally enables a company to raise funds by selling newly issued shares, while a direct listing allows existing shareholders to sell part of their holdings after the company enters the exchange.
For private firms, the Tk1,000 crore annual turnover-or-assets condition would be the main entry test. The BSEC set to raise direct listing threshold is intended to ensure that only large and financially established businesses can use this route.
Different Standards for Different Types of Companies
The draft framework provides separate criteria for state-owned enterprises, multinational companies, banks, non-bank financial institutions and insurance companies. These categories would not necessarily be assessed under the same requirements as privately owned industrial or commercial businesses.
Telecommunications and ICT infrastructure providers licensed by the Bangladesh Telecommunication Regulatory Commission would also be eligible if they have paid-up capital of at least Tk300 crore. The separate standards reflect the different structures and regulatory environments of financial institutions, public entities and infrastructure operators.
Why BSEC Is Raising the Bar
Direct listing was introduced in Bangladesh in 2006 and was used by several well-known companies. State-owned energy-related firms including Desco, Power Grid, Jamuna Oil and Titas Gas entered the market through this mechanism. Private companies such as ACI Formulations and Navana CNG also used direct listing.
However, concerns later emerged over price discovery and sharp market volatility. Trading around Navana CNG in 2009 became a notable example of those risks, and regulators eventually closed the direct-listing route in 2010.
The issue resurfaced in 2020 when Best Holdings sought a direct listing on the Dhaka Stock Exchange. The renewed framework seeks to address earlier concerns through stricter financial qualifications, category-specific eligibility rules and limits on the proportion of shares that can be made available to investors.
In that context, BSEC set to raise direct listing standards not as a replacement for IPOs, but as a limited option for companies with substantial scale and stronger corporate standing.
Finance Ministry Withdraws Earlier Restriction
The policy shift gathered momentum on 5 October, when the finance ministry withdrew its 2010 circular that had barred private, state-owned and foreign companies from using direct listing. The decision followed formal recommendations from BSEC.
Withdrawal of the earlier restriction does not mean that every company can immediately pursue a direct listing. Eligibility, share-sale limits and other conditions will depend on the final BSEC rules.
FAQ: Direct Listing Rules in Bangladesh
What is the proposed asset or turnover requirement for private firms?
Private companies seeking a direct listing would need annual turnover or assets of at least Tk1,000 crore under the proposed rules.
Will a direct listing allow a company to raise fresh capital?
No. Unlike an IPO, a direct listing would involve existing shares being offered on the secondary market rather than newly issued shares being sold to raise funds.
How many shares could be offered through direct listing?
The proposed rules allow a company to make between 10% and 20% of its existing shares available to the market.
Can all Bangladesh companies use the direct-listing route?
No. Private companies would need to meet the Tk1,000 crore turnover-or-assets threshold, while state-owned enterprises, multinationals, banks, non-bank financial institutions, insurers and certain BTRC-licensed firms would face separate criteria.