The Bangladesh Securities and Exchange Commission (BSEC) has introduced restrictions on general investors regarding the allotment of initial public offering (IPO) shares from Best Holdings, the company that owns the renowned Le Méridien five-star hotel.
In a letter issued to the company on Tuesday, the commission specified that “the subscribed limit for the application amount is Tk10,000 or its multiples, but not exceeding Tk15 lakh.”
On December 13 of the previous year, the regulatory body had lifted the restriction on IPO applications by general investors for Best Holdings. This change allowed investors to apply for shares without any value limitations, as the standard Tk10,000 cap on IPO applications had been removed by the regulator.
Following the adjustment in IPO applications on December 30, 2023, the Dhaka Stock Exchange (DSE) conducted an awareness program with brokerage house representatives, instructing them to adhere to the new guidelines.
This decision by the commission generated mixed reactions among general investors. The modification now permits an investor, under a single beneficiary owner’s (BO) account, to apply for a maximum of Tk15 lakh, starting at Tk10,000 for subscribing to Best Holdings’ shares.
According to BSEC, an investor aiming to apply for an IPO in the primary market must have a minimum investment of Tk50,000 in the secondary market.
In October 2023, Best Holdings received BSEC approval to raise Tk350 crore through an IPO under the book-building method from the capital market.
The IPO subscription period will commence on January 14, 2024, and continue until January 18.
To apply for the company’s IPO shares, Bangladeshi resident general investors are required to have a minimum investment of Tk50,000 in matured listed securities, and non-resident Bangladeshis (NRBs) need Tk1 lakh as of January 3, 2024.
Earlier, the electronic bidding for the company’s shares took place between November 20 and November 23, where the cut-off price was fixed at Tk35 each.
Qualified and institutional investors, including mutual funds, will purchase 25% of the company’s shares at the cut-off price, while individual investors can acquire the remaining shares at a 30% discounted price of Tk24 each.
Best Holdings plans to allocate 50% of the fund (Tk176 crore) for building construction and other civil works, 33% (Tk115.6 crore) for the repayment of existing liabilities, and around 13% for local machinery and equipment acquisition.
