Good Companies Can Now List Without Issuing New Shares as BSEC Direct Listing Rules Take Effect

Certain categories of government and private companies will now be able to list on the stock market without issuing any new shares. Sponsors, directors and existing shareholders will be allowed to sell shares they already hold, but at least 10 percent of the shares must be sold within 30 working days from the first day of listing.

To create this opportunity, the Bangladesh Securities and Exchange Commission (BSEC) has framed new rules titled the 'Bangladesh Securities and Exchange Commission (Direct Listing of Securities on Stock Exchange) Rules, 2026', which were published in the official gazette and took effect on 18 October.

Under the new rules, government institutions, wholly or majority state-owned companies, and companies in which the government holds at least 10 percent ownership directly or indirectly will be eligible for direct listing. Wholly or majority foreign-owned companies will also be able to apply.

In addition, scheduled banks, financial institutions and insurance companies with net assets of at least Tk 500 crore according to their latest audited financial statements will qualify. Companies with annual turnover of at least Tk 1,000 crore will also be able to apply.

Eligibility limits have also been clearly set. To list directly, a company must have operated for at least five years, must have posted profits from its core business in the previous two financial years, and must have no accumulated losses. It must also have positive cash flow from operating activities in the latest financial year.

The rules further state that neither an applicant company nor any of its sponsors or directors may be a loan defaulter. The company must obtain an investment-grade rating from a BSEC-registered credit rating agency, and its financial statements must be prepared under international financial reporting standards and audited under international auditing standards.

After listing, sponsors and directors must collectively hold at least 30 percent of the paid-up capital, and the company must commit to meeting the BSEC's corporate governance conditions within one year.

For price discovery, the company will set an indicative price in consultation with a merchant banker, using at least two valuation methods — one absolute and one relative. On the first day, the minimum selling price of shares must be kept at least 25 percent below the indicative price.

Trading rules have also been laid down. On the first trading day, investors will be able to place buy bids during the first two hours, while sponsors and sellers will not be allowed to place sell orders during that period. Sell orders can be placed after the two hours end.

More safeguards have been included for investors: within 30 working days of the sale, no individual or institution may buy more than 1 percent of the total shares sold; on the first two working days, single buy orders of fewer than 100 or more than 1,000 shares will not be accepted; and for one year from the first day, the offerors may not buy the company's shares, nor sell more than 50 percent of their holdings for a specified period.

K A M Majedur Rahman, a former managing director of the Dhaka Stock Exchange (DSE), said the direct listing initiative is a good one. Through it, state-owned companies such as the Jiban Bima and Sadharan Bima corporations and good companies in the energy sector, as well as private-sector companies, will now be able to come to the market.

However, market insider Shakil Rizvi said implementing these rules will be challenging — the biggest challenge being what the share price of a new company will be.

Amid market reforms and efforts to simplify investment, total trading by foreign investors on the Dhaka Stock Exchange rose 37.6 percent in the first eight months of 2026. Stakeholders hope that if the supply of quality companies in the market increases through direct listing, investor confidence will recover further.