News

Direct listing can deepen the capital market
01 Oct 2026
Source: The Daily Star

Bangladesh’s capital market is at a point where meaningful reform is no longer an option; it is a necessity. Over the years, we have seen a gradual erosion of public interest and confidence. Restoring that confidence will require credible institutions, quality companies, long-term investors and a market structure that creates value. Against this backdrop, I believe the Bangladesh Securities and Exchange Commission’s initiative to introduce a more effective framework for direct listing is timely.

For decades, Bangladesh’s corporate sector has relied heavily on bank financing. Banks will continue to play a central role, but this dependence has also put pressure on the banking sector. An economy of our size and ambition cannot sustainably depend on bank loans for corporate financing. We need both a strong banking system and a deeper capital market. A well-functioning capital market can provide long-term equity financing, reduce debt dependence, ease pressure on banks and create a healthier financial system.

A well-designed direct listing framework can bring established companies to the capital market, broaden investment opportunities, improve liquidity and help rebuild investor confidence.

Bangladesh has no shortage of successful and reputable businesses. Many have strong fundamentals, sound governance and decades of operating history. Yet they may not have an immediate need for fresh capital. Under the traditional IPO model, this can make entering the capital market less compelling. Companies that do need additional capital have also faced lengthy approval processes, valuation restrictions, limited flexibility in structuring an IPO and other regulatory requirements. As a result, many good companies have remained outside the market. This is where direct listing can create a new pathway.

A direct listing framework can reduce the time and complexity involved in bringing established companies to the market. It can provide a mechanism for sponsors and directors to realise fair value for part of their holdings, unlocking wealth they have created through decades of work. It can also create new investment opportunities for the public and liquidity for existing shareholders.

Listing can offer established companies a transparent market-based valuation, stronger visibility, improved governance and greater institutional discipline. For eligible companies, the 7.5 percent tax differential can also strengthen the commercial rationale for listing.

Importantly, direct listing does not have to be linked to an immediate funding requirement. A company may list without needing fresh capital while retaining the ability to raise equity in the future through rights issues or further public offerings when capital is required. The objective should not simply be to increase the number of listed companies. It should be to bring the right companies into the market: businesses with strong fundamentals, credible management, sound governance and a proven track record. If some of Bangladesh’s most respected companies enter through a direct listing mechanism, it could improve market depth, broaden investment opportunities, enhance liquidity and help rebuild investor confidence.

At IDLC Investments, we have spent many years developing Bangladesh’s capital market through complex transactions and innovative initiatives. This has allowed us to engage with leading business groups. Many successful businesses are not opposed to listing; rather, they need a framework that is practical, predictable and commercially viable. The discussion on the draft Bangladesh Securities and Exchange Commission (Direct Listing of Securities on the Stock Exchange) Rules, 2026, held by the Commission with market participants, including IDLC Investments and leading business groups, is a welcome development. The consultation can bring practical market experience into the regulatory framework.

Ultimately, the capital market should be viewed not merely as a platform for trading shares, but as a strategic pillar of Bangladesh’s economic architecture, connecting long-term capital with productive businesses, supporting entrepreneurship, strengthening governance and reducing dependence on debt.

The writer is the managing director of IDLC Investments Limited

 
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