an initial public offering or ipo is a mechanism for companies to make available for the first time...

7/23/2019 An Initial Public Offering or IPO is a Mechanism for Companies to Make Available for the First Time Shares of Their…

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An initial public offering or IPO is a mechanism for companies to make available for the first

time shares of their stock. Its purpose is to either raise capital for a new company or to fulfill a

desire by an existing company to make their shares available to the public. Whether it is a new or

existing company, the IPO process follows a fairly straight forward path with precise steps along

the way. here are some instructions you have to follow to get consent from !ecurities "

#xchange $ommission. hese instructions are mandatory for investors. hrough this process

Investor has to organi%e all the relevant information. We have divide listing procedure in two

Parts according to their behavior, one is work before $onsent and another in work after consent.

In the whole listing procedure, the works are separable like work before IPO consent and work

after IPO consent.

Works before Obtaining the $onsent from !ecurities #xchange $ommission

&' Selection of Advisors: (efore applying for consent every company suppose to have

section of legal advisor. )egal Adviser is responsible for !ecurity of internal information.

)ocal Organi%ation usually appoints only )ocal Advisor and multinational organi%ation

supposed to have two legal advisers both )ocal " *oreign.+' Completion of Valuation and restructuring: (efore getting consent Organi%ation will

have to complete their total asset aluation. Another important process is changing

organi%ation employee management and also restructuring and obtaining -eports thereon.

)isted Organi%ations all top level employee usually has to follow by the Auditor./' Selection of Bankers to the Issue: (ankers )etter confirming opening of separate

account for IPO and accepting their appointment as such -ule 0&1 of Public Issue -ules

+223.(ankers to the issue will be the important stake holder and they will be responsible

for deposit and withdraw money of investors.4' Selection of underwriters: !election of underwriters " completing underwriting

agreement is another essential process of IPO listing procedure. 5nderwriters are liable

for successful float of all the shares. If the shares under subscribed, then underwriter will

have to buy and hold that particular amount of shares. (ut, in case of (angladesh $apital

6arket 7istory, It never happens besides applications are over subscribe more than

&2times of offer.8' Collection of NOC from Lenders: $ollection of 9o Ob:ection $ertificates ;9O$' from

)enders is a mandatory to get IPO approval. )ender should have to issue a letter that if

the $ompany change their existing capital structure then they will not have any ob:ection.



If the company have loan from several banks, then it is necessary to collect 9O$ from all

the lenders.3' Audit of Accounts: Organi%ation supposed to have Audit of their accounts by authori%ed

Auditor duly signed on each page, by the issuers chief executive officer<managing

director, chief financial officer and issue manager according to the -ule 0/ of Public Issue

-ules +223. he audited account shall not be older than &+2 days of the end of the period

for which the *inancial !tatement is prepared. &2 copies of *inancial !tatement have

submitted to !#$, one copy each to =!# and $!#.>' Credit ating eport: ?enerally it takes at least two months to complete the $redit

-ating after the Annual Audit is completed and credit report is mandatory for IPO listing

process. -ule &1 ;+&' of the Public Issue -ules +223 says that the application for consent

shall be accompanied by some exhibits including $redit -ating -eport. 9o issue of

shares at a premium or issue of right shares shall be made by a public company unless the

issue is rated by a credit rating company and declaration about such rating is given in the

prospectus or right offer document ;!ec./ of $redit -ating $ompanies -ule &@@3'.1' Agreement with C!BL: (efore submission of Application to !#$, it is mandatory to

complete agreement with $entral =epository (angladesh )imited ;$=()'. $=()

maintain online transaction of securities by taking some fees and they listed all the

investor in !tock 6arket. At present there are more than &322222 ;sixteen lac investors'

in (angladesh $apital 6arket. After completion of agreement now company will have to

take decision on depositing sponsors shares during )ock0in0Period with $ustodial (ank

or with $=().@' Approval from Sponsors: At this point of IPO process now it is necessary to take

approval from the sponsor and documentation the process, undertaking and information

from !ponsors< =irectors, =eclarations, =ue =iligence etc.&2' efund warrant guarantee: $ompany supposed to have opened a separate (ank

Account for refund warrant purpose. It also called 6other Accounts for -efund Warrant.

hrough this account $ompany has to refund warrant money to the investor, who will not

get the share.&&' !raft "rospectus: (efore applying for IPO $ompany will have to drafting the abridge

version of prospectus and dealing with Printers on printing of Prospectus, *orms, -efund

Warrants, )etter of Allotment etc.



&+' Application Su#mission: Application has to submit to !#$ for consent to Issue with

approved Prospectus and deposit the ?ovt. *ees of (= &2,222. If the application is

incomplete the !#$ shall inform the applicant within +1 days of receipt of application

and if the issuer fails to remove incompleteness within /2 days of communication, it shall

file fresh application. ;-ule 0&> of Public Issue -ules +223'&/' Consent from S$C: if the application and information, documents are provided by the

applicant are reliable then !#$ shall issue letter of $onsent within 32 days of receipt of

complete application. ;-ule 0&>;4' of Public Issue -ules +223'. If the application

submitted by the applicant is fresh and correct then usually it takes 48days to get IPO

consent.

Works after Obtaining the $onsent from !ecurities #xchange $ommission&'

&' Su#mission of prospectus: After getting approval from !#$ the first step is to submit

the abridged version of prospectus in !#$ for approval, usually before &20&8 days prior

to opening of subscription. And also have to submit signed copy of the Prospectus with

-egistrar of oint !tock $ompany ;-!$' on or before the date of publication of

prospectus in newspapers.; !ection &/1 of $ompanies Act &@@4'+' Announcement for the investor: $ompany will have to Publish of abridged version of

prospectus in 4 newspapers ;+ #nglish B + (engali' within / working days of the

issuance of $onsent )etter ;-ule 8;&' of Public Issue -ules +223'. A paper clipping of published Abridged ersion of Prospectus has to submit to !#$ within +4 hours of

publication in newspapers. Issuer $ompany will have to submit a diskette containing the

text of vetted prospectus to !#$, =!#, $!# and Issue 6anager and will have to post the

full prospectus vetted by !#$ in Websites of Issuer, !#$, =!#, $!# " Issue 6anager

within / working days of the issuance of $onsent )etter ;-ule 3;+' of Public Issue

-ules+223'./' "rovide full prospectus: Issuer $ompany will have to submit 42 copies of printed

prospectus to !#$ and also submit printed copies of abridged version Prospectus and

application forms to (angladesh #mbassies by #6! of postal departments within

8working days from the date of publication of abridged version of prospectus in

newspapers.4' Application for listing: At this point Applicant should apply to all !tock #xchanges in

(angladesh and submit the vetted prospectus to the !tock #xchanges within > working



days from the date of issuance of the $onsent )etter ;-ule &> of the Public Issue

-ules+223'.8' Su#scription period: !ubscription )ist shall be opened and sale of securities commence

after +8 days of publication of Abridged ersion of Prospectus. ;-ule 0 8 of Public Issue

-ules +223' !ubscription )ist shall be closed after remain open for 8 consecutive

banking days. (y 9-( be made to the Issuer $ompany within the closing date so as to

reach the $ompany by the closing date plus @ days.3' %ransaction rate: o apply spot buying rate ; $lean' in 5! C and 5D pound and #uro

of !onali (ank for subscription of 9-( s. !pot buying rate to be collected from !onali‟

(ank on the date of opening of subscription.>' In case of under su#scription: In case of under subscription, Issuer shall notify the

underwriter to take up underwritten shares. he time limitation is within &2 days of close

of subscription date. *ull payment is to be made by the underwriter of underwritten

amount within &8 days of Issuers notice.1' Application to Stock $&changes for Listing: *or application for )isting issuer has to

submit it to !#$ attested copies of applications filed with !tock #xchanges within

>working days of issuance of consent letter ;Application shall be made by the $ompany

at least &2 days prior to issue of first Prospectus ;-egulation / ;+' of =!# )isting

-egulations'.@' Approval of listing: ?ranting of listing applications by =!# and $!# for issuing the

share. he #xchange shall decide the Euestion of granting permission within a maximum

period of 3 weeks from closure of subscription lists. ;-egulation /;/' of =!# )isting

-egulations'.

an initial public offering or ipo is a mechanism for companies to make available for the first time...

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