What is an IPO, really?
IPO stands for Initial Public Offering. In simple words, it is the first time a private company opens its doors and invites ordinary people like you to become part-owners by buying its shares. Before the IPO, only the founders and a few big investors owned the company. After the IPO, anyone with a share account can own a piece of it. The company does this to raise money — to build a new factory, pay off loans, or grow the business.
Why so many people chase IPOs
IPO shares are sold at a fixed, often modest price. Many of these shares jump in price on their first day of trading, so investors who get them can make a quick profit. That is why IPOs are one of the most talked-about things in the Bangladeshi share market. But be careful — not every IPO goes up, and chasing them blindly can also lose you money. Treat it as one opportunity among many, not a guaranteed win.
What you need before you apply
- A BO account (the account that holds your shares) — if you don't have one yet, open it first
- Some money kept ready in the bank account linked to your BO account
- Your BO account must have a small minimum investment in other listed shares (the rule changes from time to time, so ask your broker the current amount)
- Your mobile number and bank details should be correctly linked, so you get updates and any refund
How to apply — step by step
- Step 1: Watch for the IPO announcement. The company and your broker will share the dates when applications open and close
- Step 2: Make sure you have enough money in your linked bank account to cover the shares you want
- Step 3: Apply during the open window — through your broker's app or website, or your bank's app if it supports IPO applications
- Step 4: Enter your BO account number and confirm the amount. The money is held aside until the result comes out
- Step 5: Wait for the result. If you are selected, the shares come to your BO account. If not, your money is returned
Lottery or sure shares? How allotment works
Sometimes far more people apply than there are shares available. In that case, shares are given out by a lottery — a fair, random draw — so not everyone who applies will get shares. Other times, every applicant gets a set number of shares (this is called allotment). Your broker will tell you which method an IPO is using. If you don't win the lottery, don't worry — your full application money is returned to your account.
What happens after you get the shares
Once shares land in your BO account, you simply wait for the listing day — the day the company starts trading on the market. From that day, you can sell your shares whenever you like, just like any other stock. Many people sell on the first day to take an early profit, while others hold on, hoping the company grows over the years. There is no single right choice — it depends on the company and your own plan.
A friendly word of caution
- Read the company's offer document — it explains what the business does and how it plans to use your money
- A popular IPO is not always a good company. Check if it actually earns steady profit
- Never borrow money just to apply for an IPO
- If you get shares and the price jumps unrealistically on day one, be careful — quick spikes can fall just as fast