Country’s first SME gets nod to go public

The Bangladesh Securities and Exchange Commission (BSEC) yesterday gave go-ahead to Nialco Alloys to go public.

In order to help the company meet its demand for long-term financing, the commission has approved the country's first quality investors offering (QIO).

The stockmarket watchdog took the decision in a meeting at its headquarters yesterday, the BSEC said in a press release.

With this decision, Nialco Alloys, a manufacturer of high-grade bronze and brass ingots, will also become the country's first-ever small and medium enterprise (SME) to enter into the stockmarket.

The company aims to raise Tk 7.5 crore from qualified investors by issuing 75 lakh shares at Tk 10 each.

Bangladesh's SME sector has suffered from financial deficiencies for many years now even though these firms have a huge impact on the country's gross domestic product and employment generation.

With this backdrop, SMEs had repeatedly urged the BSEC to give a chance to raise funds from the stock market.

The commission eventually appeased those demands by passing a rule in 2018 that allowed all companies with paid-up capital of between Tk 5-30 crores to raise funds from the stock market.

There are about 78 lakh SMEs in Bangladesh employing about 2.5 crore workers in the sector, according to the Bangladesh Bureau of Statistics.

If any individual has investments of more than Tk 1 crore in listed securities, then he or she is considered a qualified investor.

Nialco Alloys shares would be traded at the bourses' SME platform, where general investors are not allowed to make purchases.

The company will not be allowed to declare any bonus shares within three years of its market debut, the BSEC said.

Its earnings per share was Tk 0.91 for the period that ended on September 30, 2020, while its net asset value without a revaluation reserve was Tk 12.43.

With the QIO proceeds, the company will develop its facilities and bear the IPO expenses. MTB Capital is the issue manager.

The BSEC also approved an open-ended mutual fund named RBIMCO BGFI Fund at the meeting.

The primary target of the fund is Tk 10 crore, of which Tk 1 crore would be provided by its fund manager, the Royal Bengal Investment Management Company, while the rest would be open for general investors.

The Bangladesh General Insurance Company is its trustee and Brac Bank is the fund's custodian.