The Bangladesh Securities and Exchange Commission (BSEC) has granted final approval for the issuance of zero-coupon bonds worth Tk 510 crore by NAGAD, a mobile financial service provider.
NAGAD, which began its operations in 2018, has consistently maintained a leading position in the market. However, questions have arisen regarding the recent issuance of bonds by the company.
It has been reported that NAGAD has mobilized Tk 625 crore has been making loss so far, averaging an annual mobilization of Tk 125 crore. That is, the company is losing an average of 125 crore takas every year. Surprisingly, despite being a mobile financial institution, NAGAD has been granted approval by the BSEC to issue bonds.
When approached for comment, the Head of Public Communications at NAGAD, Muhammad Zahidul Islam, stated to Orthosongbad that it is common for large companies have losses in the beginning. This holds true even for startup companies. Companies like Amazon, Uber also made losses in the beginning. We hope to return to profitability by 2025.
The Managing Director and Spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), Mohammad Rezaul Karim, stated that the institution must adhere to regulations regarding bond approvals, which require the company to maintain sufficient liquidity and provide a profitability forecast. In the case of NAGAD, they meet the liquidity requirement, and they have presented a profitability forecast. The company incurs expenses due to various factors, including providing bonuses to customers. It is expected that they will generate income within a short period.
It is worth mentioning that private placements allow only corporate entities and eligible investors to invest in NAGAD’s bonds. The nature of the bond is transferable, redeemable, and convertible. The zero-coupon bond has a maturity of five years, with a coupon rate of 10%.
