Bangladesh’s capital market regulator has reopened a route that could bring large private companies, foreign-owned businesses and financial institutions to stock exchanges without requiring them to raise fresh capital.
The Bangladesh Securities and Exchange Commission (BSEC) has approved a draft framework allowing eligible companies to list through direct listing — selling existing shareholders’ stakes instead of issuing new shares through an initial public offering (IPO).
The move revives a mechanism that was effectively closed to private-sector entities for nearly a decade after concerns over valuation and investor protection.
The BSEC approved the draft “Bangladesh Securities and Exchange Commission (Direct Listing of Securities by Stock Exchange) Rules, 2026” at its 1,027th commission meeting on Tuesday, chaired by BSEC Chairman Masud Khan. The draft will now be published for public comments before final approval.
Under the proposed rules, eligible companies can list by offloading 10 per cent to 20 per cent of shares held by existing shareholders.
Unlike an IPO, direct listing does not raise new capital for the company. Instead, it allows existing shareholders to sell part of their holdings while providing the company access to the public market.
The move addresses a long-standing challenge in Bangladesh’s capital market: many large and financially strong companies remain unlisted because they do not need fresh equity, while exchanges need more quality securities.
Large companies may still seek listing for succession planning, shareholder liquidity, tax benefits and greater corporate visibility.
For such firms, an IPO can be unnecessary because it requires raising funds they may not need.
The proposed framework could attract large corporate groups, multinational companies and established financial institutions that have remained outside the market.
Eligible entities would include fully or majority government-owned companies, firms where the government directly or indirectly owns at least 10 per cent of paid-up capital, and companies fully or majority owned by foreign shareholders.
Telcom regulator-approved telecommunications and ICT-related service providers, ICT infrastructure companies and manufacturing firms with at least Tk300 crore in paid-up capital would also qualify.
Scheduled banks, financial institutions and insurance companies with at least five years of commercial operations would be eligible.
Companies with annual turnover or total assets of at least Tk500 crore would also qualify.
Stock exchanges, the depository and clearing system operators also apply for direct listing.
The return of direct listing comes after a troubled history.
Bangladesh introduced the mechanism in 2006, but concerns later emerged over companies entering the market at inflated valuations.
Following criticism of manipulated pricing in direct listings involving several private-sector companies, BSEC in 2016 issued a formal order directing the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) to stop accepting direct listings for non-government entities. The route was effectively restricted to state-owned enterprises (SOEs).
The new proposal would therefore represent a major expansion of the mechanism rather than simply restoring the previous arrangement.
The earlier experience has made valuation and investor protection the biggest concerns.
BSEC says the initiative is part of its broader effort to deepen Bangladesh’s capital market by bringing established businesses into the listed universe.
BSEC Chairman Masud Khan said several large companies had already shown interest in direct listing.
The commission is simultaneously reviewing the IPO process to overhaul how primary shares are priced and the extent of checking the disclosed information.
Experts said the stock exchanges need large and established companies like Unilever, Nestle. But the IPO model is mainly designed for businesses seeking fresh funds.
Direct listing removes that barrier.
But without strict oversight, it could become an easier exit route for existing shareholders rather than a genuine expansion of public investment opportunities, said analysts.
The public consultation process will now determine how BSEC balances market expansion with investor protection before finalising the rules.
