Looking to invest in a company before it becomes big on the stock market?
Participating in Initial Public Offerings (IPOs) or Private Placements can be a great way to get in early—sometimes at a discounted price.
But how does it actually work in Bangladesh?
🏢 What Is a New Stock Issuance?
When a company needs to raise money, it can issue new shares to investors. There are two common ways:
✅ Initial Public Offering (IPO)
This is when a company goes public—listing its shares for the first time on the Dhaka Stock Exchange (DSE).
Anyone with a valid BO (Beneficiary Owner) account can apply.
✅ Private Placement
In this case, shares are offered directly to a select group of investors, usually institutions or high-net-worth individuals.
These deals often have special conditions, and are not open to the general public.
Both offer the chance to buy shares before they start trading on the DSE, which means you may get in at a discounted price.
📝 How to Apply for New Stocks in Bangladesh
1. Participating in an IPO
Here’s how the typical IPO application process works:
✅ Stay Informed
IPOs are announced through newspapers, company websites, DSE press releases, and sites like BengalMarketWatch.com.
✅ Have a BO Account
To apply, you must have a BO account with a brokerage house or merchant bank registered with CDBL.
✅ Online or Offline Application
Most brokers now offer online IPO applications via mobile apps or web portals. You’ll choose how many shares you want to apply for, and your bank or broker will deduct the funds.
✅ Refund or Allotment
If you don’t receive the full number of shares, the unused portion of your money is refunded directly to your bank account.
2. Participating in a Private Placement
These are less common for individual investors but sometimes available through brokers or networks.
✅ Invitation Only
You’ll need to be invited by the company or a participating investment institution.
✅ Sign a Subscription Agreement
You’ll receive documents outlining terms, pricing, and conditions. Read carefully before signing.
✅ Due Diligence Is Key
Review the company’s background, business plan, and financials. This is a higher-risk investment, so understand what you’re getting into.
💸 Discount Price vs. Market Price
- Discount Price = The special early price you pay in an IPO or private placement.
- Market Price = The price the stock starts trading at once listed on DSE.
Sometimes the market price jumps higher (you profit), but it can also fall (you lose). Always compare the IPO price to similar companies and financial performance.
⚠️ Things to Check Before You Apply
Ask yourself these questions:
- 📌 Is the company’s business strong and easy to understand?
- 📌 Have you read the prospectus carefully?
- 📌 Are you comfortable if the share price drops right after listing?
- 📌 Is there a lock-up period (a time when you can’t sell your shares)?
- 📌 Do you believe in the company’s long-term growth?
📊 IPO Scene in Bangladesh
- IPOs are often oversubscribed, meaning not everyone gets full allotment
- Most IPOs are in sectors like financials, textiles, energy, and pharmaceuticals
- Companies use IPO funds for expansion, debt repayment, or capital improvement
Private placements are usually offered by mid-sized or fast-growing companies needing specific funding partners.
❓ Common Questions
Q: Do I need a lot of money to apply for an IPO in Bangladesh?
A: Not at all. You can often apply with as little as BDT 10,000, depending on the IPO terms.
Q: Are IPOs always profitable?
A: No. Some perform well, others fall after listing. Always check company fundamentals and market conditions.
Q: Can I sell IPO shares immediately?
A: Usually yes, after the stock is listed. But some placements may restrict selling for a few months. Check the terms.
📩 Want alerts on upcoming IPOs and exclusive investment opportunities?
Subscribe to our IPO Watch Bulletin or email us at:
📧 info@BengalMarketWatch.com