BSEC conditionally approves 30% stake sale in Dominage Steel

The Bangladesh Securities and Exchange Commission (BSEC) has conditionally approved a proposal by listed engineering company Dominage Steel Building Systems Limited to sell around 30% of its shares to new investors.

At its latest commission meeting, the regulator approved the transfer of 30.78 million shares held by the company's sponsor-directors to Akij Resources Limited, Sheikh Jasim Uddin and Faria Hossain. However, the specific conditions attached to the approval were not immediately available. 

Infograph: TBS

The proposed transaction will result in the transfer of a significant stake in the listed company to the new investors, subject to compliance with the conditions set by the securities regulator.

The proposed transfer will give the new investors around a 30% stake in Dominage Steel. The transaction will be executed through an off-market negotiated transaction under CDBL Bye-Laws 11.6 through a matched transaction.

The company's board of directors approved the proposed sale of the sponsor-directors' shares at a meeting held on 25 April. The company subsequently applied to the BSEC for approval of the transfer.

BSEC's conditional approval

The Bangladesh Securities and Exchange Commission (BSEC) has imposed several conditions while approving Dominage Steel Building Systems Limited's proposed share transfer.

Under the conditions, the company's sponsor-directors must collectively hold at least 30% of the company's shares, while each sponsor-director must individually hold at least 2%.

The regulator also barred the shares subject to the transfer from being mortgaged or pledged to obtain any loan.

In addition, Dominage Steel must regularise or resolve all pending issues within six months of the approval. The proposed share transfer must also be completed within 30 working days from the date of BSEC approval.

The conditions were imposed as part of the commission's approval of the transfer of 30.78 million shares held by the company's sponsor-directors to Akij Resources Limited, Sheikh Jasim Uddin and Faria Hossain.

Ownership structure

According to the company's shareholding data as of 31 July 2026, general investors held 54.18% of Dominage Steel's shares. Institutional investors held 15.60%, while foreign investors held 0.02%.

Together, these three categories accounted for 69.80% of the company's shares. The remaining 30.20%, or roughly the same as the proposed 30.78 million shares, was held by sponsor-directors.

Therefore, once the proposed transfer is completed, Dominage Steel's ownership structure will undergo a significant change. Almost the entire stake held by the sponsor-directors will move to the new investors, potentially resulting in a major change in the company's control and management.

Why the takeover

Against the backdrop of Dominage Steel's prolonged financial and operational weakness, market observers see the potential ownership change as an opportunity for the company to turn around.

Akij Resources is a concern of Akij Group and has business experience in the steel sector. The entry of the new investors could therefore bring fresh capital into Dominage Steel. A new management team may also seek to revive production and business operations.

Market observers say fresh capital could help reduce the company's financial pressure and address working capital constraints. Akij Resources' experience in the steel and engineering sectors could also strengthen Dominage Steel's operational capabilities.

Earlier, Raihan Kabir, deputy chief financial officer of Akij Resources, told The Business Standard that the company viewed the potential acquisition positively. However, the proposal was then at a preliminary stage, with financial and legal assessments and due diligence still underway.

Weak financial performance

Dominage Steel's current financial performance remains weak. During July-December of FY2025-26, the company's revenue fell 54% year-on-year to Tk5.75 crore. It incurred a net loss of Tk0.94 crore during the period, resulting in a loss per share (LPS) of Tk0.09.

The company's production and operational activities have also come under scrutiny in recent years. During an inspection conducted by the Dhaka Stock Exchange (DSE) in late 2025, Dominage Steel's factory in Narsingdi was found closed. The company, however, said its Savar unit remained operational.

Dominage Steel said that, as an engineering and construction company, it does not need to maintain continuous production at all of its factories. A significant portion of its business is project-based, with much of the work carried out at construction sites.

Share price rises on takeover speculation

Despite its weak fundamentals, Dominage Steel's share price has risen sharply amid speculation over a possible change in ownership.

The company's share price has surged by around 147% since March this year, reaching Tk61.70 in the latest trading session.

Market observers believe expectations of a change in ownership, fresh investment and a potential business turnaround have contributed to the sharp rise in the share price.

However, they caution investors against making investment decisions solely on expectations surrounding the potential acquisition, given the company's weak financial performance. Listed on the stock market in 2020, Dominage Steel declared only a 0.35% cash dividend for FY2024-25.

Challenges ahead

The BSEC's approval has moved Dominage Steel's proposed ownership change one step closer to completion. The key question now is how effectively the company can revive its operations after the transfer of shares.

If the new investors provide sufficient capital, expand production and project activities, strengthen management and improve the company's financial position, Dominage Steel could have an opportunity to turn around.

However, ownership change alone will not be enough to ensure a sustainable recovery from its prolonged financial weakness. The new management's actual steps, capital investment and ability to execute its business plan will ultimately determine whether Dominage Steel can make a meaningful turnaround.