The securities regulator is set to incorporate a couple of provisions in its public issue rules under which the aspirant companies would require to declare their future financial growth projection in IPO prospectus.
The Bangladesh Securities and Exchange Commission (BSEC) is also considering inclusion of a provision of mentioning the names of at least five listed companies, managed by an issue manager, in the IPO prospectus to be submitted for the BSEC's consent.
The securities regulator is likely to approve the proposed amendment to public issue rules soon by including some other provisions to ensure more accountability and transparency of issuer companies and relevant stakeholders.
"The company's future projections and the previous performance of an issue manager will help investors to take decision before making investments," said a BSEC official on the condition of anonymity.
According to the official, the company's future projection set for at least five years will include the business plan, possible growth of profits.
The official said, the investors will also be able to know what type of companies are managed by an issue manager if they review the issue prices, opening market prices, dividend records and present market prices of some companies managed by that issue manager.
Asked, whether the regulator would take any measure if the future projections of newly listed companies are not reflected through their operations, the BSEC official said they are considering the provisions in sync with international practices.
"If the provision of future projection is incorporated, the investors can ask the company the reasons behind its failure in fulfilling the future targets mentioned in IPO prospectus," the BSEC official said.
The proposed amendment to public issue rules is also likely to incorporate the other provisions such as the issue managers' involvement with the proper utilisation of IPO funds.
The BSEC officials said, the upcoming amendment is set to include the provision of mandatory audit of financial statements of non-listed companies by any of BSEC's auditors' panel before going public.
In July 16 last, the securities regulator approved a 36-member panel of auditors for the listed companies.
As per another proposed provision, foreign institutional investors will avail quota facility in the IPOs.
Presently, there is a quota of 20 per cent for investors affected during the 2010-11 stock market crash.
A quota of 10 per cent is reserved for non-resident Bangladeshis (NRBs), 10 per cent for mutual funds and the remaining 60 per cent for general investors.
As per another proposed provision of public issue rules, the companies willing to go public will have to disclose the history of their changing capital structure.
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