Twelve companies got listed on the stockmarket in 2015, raising around Tk 830 crore through initial public offerings.

Of the new securities, nine were equity stocks and three were mutual funds, according to Dhaka Stock Exchange data.

In 2014, a record number of 20 companies raised around Tk 1,200 crore from the stockmarket.

Experts said the regulator's conservative policy in approving IPOs, a time-consuming process and entrepreneurs' reluctance to go for market exposure held back the primary market.

Fifty companies submitted their IPO proposals to Bangladesh Securities and Exchange Commission in 2015.

The regulator adopted a go-slow policy while approving IPOs mainly due to the downward trend in the secondary market, an official of the commission said. The market was not that lucrative for companies to raise funds from public, said Md Moniruzzaman, managing director of IDLC Investments.

But the entrepreneurs were keen to come to the market and raise funds, he said. The current process for approving IPOs is quite lengthy, which often discourages entrepreneurs, he said.

Uncertainties are there also on the pricing of the shares, he said. The entrepreneurs are not sure about how much money they would be able to raise through IPOs, he said.

The recent amendment to the IPO rules may encourage entrepreneurs to enter the IPO market, he said.

Companies that intend to offer primary shares with premium prices will have to follow the book building method to raise capital from public, according to the revised IPO rules.

Book building is a modem IPO process

through which an issuer attempts to determine the offer price for its security based on demand from institutional investors.

The price of an IPO share is determined through automated bidding by different financial institutions.

Faruq Ahmad Siddiqi, a market analyst and a former chairman of the BSEC, also identified dearth of quality IPOs as a major reason behind the existing low investor confidence. Some investors even incurred losses from IPOs, he said.

"We need big and reputed companies to be listed on the market."

However, the pricing of new securities in the secondary market was not so attractive for investors, as the market has been on a downward trend throughout 2015.

Between January 1 and December 31, DSEX, the benchmark index of the Dhaka Stock Exchange, declined 6.31 percent to finish the year at 4,629.64 points yesterday. With the new ones, the DSE now has 559 listed securities.