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NRB Bank and Protective Islami Life Insurance get exemptions for IPO

To mark:

  • From the IPO fund of Tk100 cr, NRB Bank will invest Tk92 cr in government securities
  • The consolidated net interest income was Tkr ​​78.69 during January-September 2022. cr, an increase from Tkr 74.12. a year ago
  • From the IPO fund of Tk15 crr, Protective Islami Life Insurance will invest Tk13.95 crr in the capital market
  • At the end of 2022, the fund rose 76% to Tkr 11.64, from Tkr 6.61. in 2021

The Bangladesh Securities and Exchange Commission (BSEC) has granted exemption to NRB Bank and Protective Islami Life Insurance, allowing them to proceed with their initial public offerings (IPOs).

It is noteworthy that both companies had increased their paid-up capital by issuing shares in the two years before their IPO.

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This practice obviously violates the Public Issue Rules, which stipulate that a company cannot apply for an IPO if it increases its paid-up capital by issuing new shares within two years beforehand.

In response to this deviation, the Commission has adopted a condition under which shares issued within the two-year period preceding the submission of IPO applications are subject to a blocking period of three years from the first day of trading on the stock exchanges.

The aim of this regulatory measure is to balance the need for flexibility in capital expansion with the protection of investor interests.

While the BSEC has already approved NRB Bank’s IPO, Protective Islami Life’s application is still pending.

NRB Bank raised Tk 77.76 crore through issue of rights shares in June 2021, while Protective Islami Life raised Tk 4.50 crore in cash in December last year.

NRB Bank

NRB Bank, a fourth-generation private lender, has received approval from the BSEC to raise Tk 100 crore through an initial public offering. The bank will issue common shares worth ₹10 crore under the fixed price method.

Mamoon Mahmood Shah, managing director of NRB Bank, previously told The Business Standard: “We have received permission to raise the fund from the capital market at a difficult economic time to meet regulatory requirements. Our responsibilities will increase after we list and become more compliant.”

The bank will also be more powerful in terms of stability and expected returns, he added.

Protective Islamic life insurance

Protective Islami Life Insurance applied to raise Tk15 crore through an IPO using the fixed price method.

Common shares worth 1.5 crore will be issued with a face value of Tk 10 each. The company said in its IPO prospectus that of the Tk 15 crore, it will invest Tk 13.95 crore in the capital market, including government bonds and fixed deposits.

It will also issue 22.5 lakh ordinary shares to its employees, which the BSEC has already approved. These shares will be blocked in accordance with the Commission’s public issuance rules.

According to the prospectus, the company’s life insurance fund rose 76% to Tk 11.64 crore at the end of 2022, up from Tk 6.61 crore in 2021.

The company’s total assets increased to Tk 37.53 crore from Tk 29.53 crore last year, while liabilities fell by 31% to Tk 3.39 crore in 2022.

The net premium increased to Tk 46.71 crore from Tk 40.64 crore last year.

At the end of 2022, the company had settled claims worth Tk24 crore, up from Tk23.36 crore in 2021.

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