BSEC Approves Tk 45.90 Crore Preference Shares for DESCO Against Government Equity

TBS Report, Dhaka — Dhaka Electric Supply Company Limited (DESCO) has received formal consent from the Bangladesh Securities and Exchange Commission (BSEC) to issue 4.59 crore irredeemable non-cumulative preference shares to the government — marking the third instance in recent years where the state-owned power distributor has regularised government capital injections through preference share issuance.

According to a price-sensitive disclosure filed with the Dhaka Stock Exchange (DSE) on 2 September 2026, the shares carry a face value of Tk 10 each, amounting to a total of Tk 45.90 crore. These shares are being issued in favour of the Government of Bangladesh, represented by the Secretary of the Power Division under the Ministry of Power, Energy, and Mineral Resources, against equity already provided by the state.

💰 Preference Share Details

• 💰 Total shares: 4.59 crore
• 💰 Face value per share: Tk 10
• 💰 Total value: Tk 45.90 crore
• 💰 Share type: irredeemable non-cumulative preference shares
• 🏛 Issued to: Government of Bangladesh (Power Division Secretary)
• 🏛 Against: equity already provided by the state

📊 Previous Preference Share Issuances

This marks the third instance in recent years where DESCO has regularised government capital injections:

• 📅 July 2024: Tk 607 crore preference shares approved
• 📅 May 2025: Tk 2.38 crore preference shares approved
• 📅 September 2026: Tk 45.90 crore preference shares approved (this measure)

The cumulative preference share issuance of approximately Tk 655 crore reflects the government's ongoing capital support for DESCO's power distribution infrastructure — with the preference share mechanism regularising these injections within the BSEC regulatory framework.

📈 Market Reaction

Following the announcement, DESCO's share price experienced a marginal correction, edging down by 0.43 percent to settle at Tk 23 on the premier bourse. The limited market reaction reflects the technical nature of the preference share issuance — which regularises existing government equity rather than diluting existing shareholders.

⚠️ Z Category Status

The company's standing in the capital market remains under scrutiny, as it was downgraded to the 'Z' or junk category in October 2025 for failing to reward shareholders with dividends for two consecutive financial years. The Z category designation restricts certain trading facilities and signals to investors that the company has not generated distributable profits.

📊 Financial Performance: Recovering Bottom Line

DESCO's latest unaudited reports indicate a volatile but recovering bottom line:

• 📈 9-month FY26 EPS (Jul-Mar): Tk 1.46 (turnaround from loss of Tk 1.98 prior year)
• 📉 Q3 FY26 (Jan-Mar 2026): net loss of Tk 0.81/share (improved from Tk 1.83 loss)
• 💰 NAV per share: Tk 39.05 (as of 31 March 2026)
• 💰 NOCFPS: Tk 13.85 (up from Tk 8.98 prior year)

The turnaround from a loss-making position to positive EPS over the 9-month period is encouraging, but the Q3 net loss indicates that the recovery remains uneven and vulnerable to operational pressures — particularly the broader gas and power crisis affecting the energy sector.

🏛 Strategic Context: State-Owned Power Sector

DESCO is one of Bangladesh's key state-owned power distribution companies, serving the Dhaka metropolitan area and adjacent regions. The preference share issuance reflects the broader pattern of government capital support for state-owned utilities:

• ⚡ DESCO: power distribution in Dhaka area
• ⚡ Power Grid Company of Bangladesh (PGCB): national transmission
• ⚡ Bangladesh Power Development Board (BPDB): generation and distribution
• ⚡ West Zone Power Distribution Company: western region distribution

🌏 Strategic Implications

The BSEC approval for DESCO's preference shares carries several strategic implications:

• ✅ Government equity regularisation: converts informal capital injection to formal instrument
• ✅ Third issuance pattern: establishes systematic approach to state utility capitalisation
• ✅ No shareholder dilution: preference shares don't dilute common shareholders
• ✅ Recovery trajectory: 9-month EPS turnaround from loss to profit
• ✅ Improved cash flow: NOCFPS growth from Tk 8.98 to Tk 13.85
• ⚠️ Z category status: no dividends for 2 consecutive years
• ⚠️ Q3 net loss: recovery remains uneven
• ⚠️ Energy sector crisis: gas and power shortage affecting utility operations

The BSEC approval for DESCO's Tk 45.90 crore preference shares represents a routine but important step in the ongoing capitalisation of Bangladesh's state-owned power distribution sector. The systematic regularisation of government equity through BSEC-approved preference shares provides regulatory transparency while supporting DESCO's financial recovery trajectory — which, if sustained, could eventually support the company's return to dividend-paying status and removal from the Z category through the LDC graduation transition period.