NDBIB becomes Sri Lanka’s first investment bank to manage an off-shore IPO

NDBIB Team at the Ooredoo IPO launch standing from left: Nilukshi Jayawardena, Viraj Wijesinghe, Vajira Kulatilaka (Director), Darshan Perera (Chief Executive Office), Nilendra Weerasinghe and Dushan Gomez

NDB Investment Bank (NDBIB) has successfully raised $ 28m (Rs. 4.2b) via the Initial Public Offering (IPO) of Ooredoo Maldives PLC, a subsidiary of Qatar-based international telecommunications giant Ooredoo Group, which is present in over 10 countries with a total subscriber base of over 138 million.  

NDBIB was awarded the mandate to act as the Lead Financial Advisor and Manager to the IPO via an international bidding process which involved the participation of many regional investment banks. This is the first time an investment bank in Sri Lanka acted as the financial advisor and manager to an IPO on foreign soil.  

The IPO attracted over 10,000 applicationsand was structured as an Offer for Sale raisingfunds amounting to an approximate 10% stake in Ooredoo Maldives with NDBIB valuing the company at $ 287m.The IPO has resulted in Ooredoo Maldives being one of the largest listed companies in the Maldives, and the entity with the largest free float adjusted market capitalisation on the MSE.

The transaction assumed greater significance for being the first IPO with a fully online and integrated electronic application process. Prospective shareholders were allowed to apply for shares in Ooredoo Maldives via a special online portal where depository account opening and shareholder applications were submitted online together with soft copies of all supporting documentation. 

The online portal also offered multiple payment options such as credit and debit card payments and mobile money payments. NDBIB along with the company worked in close collaboration with the Capital Market Development Authority of Maldives and the MSE to secure expeditious approval for the IPO whilst maximising the retail investor participation via awareness campaigns.  

NDBIB together with Ooredoo Maldives devised an all-encompassing distribution strategy aimed at managing the logistical challenges in the Maldives given the fact that the archipelago’s populationof over 400,000 is scattered across 1,200 islands. 

The distribution strategy included one-on-one meetings with key high net worth individuals and institutional investors, local roadshows in main population centers accessed through domestic planes and speed boats and town hall meetings addressing professionals, students and other potential retail investors, staff storming the streets once a week across islands and a wide network of collection points including post offices, bank branches and Ooredoo distribution partners. 

This strategy reaped successful results by attracting one of the largest ever shareholder bases in listed Maldivian entities exceeding 8,000 applicants where c. 5,000 applicants were first time investors. 

Ooredoo Maldives has been a trailblazer in the Maldivian telecommunications industry achieving a stellar growth story since commencing commercial operations in 2005 as the second Telco operator in the Maldives. Ooredoo Maldives has invested over $ 194 m since its inception to provide best-in-class 4G connectivity to the entirety of Maldives. The company recorded a Revenue of $ 105 m and Profit After Tax of $ 32 m for FY 2016.

The mobile telecommunications industry of the Maldives has achieved a substantial surge in the number of subscribers to 812,128 in 2016 (c.t. 494,351 in 2010) and an increase in smartphone adoption which have led to a staggering mobile penetration of 229.9% in 2016. This mobile penetration rate is amongst the highest in the world due to many users having multiple broadband compatible devices and the prevalence of dual SIM cards among a majority of the population in order to economise their spending on telecommunications services. 

Additionally, favourable population demographics, ubiquitous connectivity throughout the archipelago and the increasing consumption of contentpredominantly due to Maldives being an island nation have augmented growth in per capita data usage placing Ooredoo Maldives in a position to capitalise on such favourable industry dynamics.

NDBIBCEO Darshan Perera, commenting on the IPO, stated: “The exemplary competence and the diverse experience portrayed by our team over the years enabled NDBIB to secure the transaction and successfully execute the same within the stipulated timelines. We deployed a relatively large transaction team to work on different aspects of the IPO and I am delightful to have completed this landmark transaction successfully exceeding the expectations of the client.”

He added: “The presence of sound companies in the Maldives and NDBIB’s involvement in landmark transactions of this nature, enhances the visibility and enables Sri Lanka to emerge as a regional hub for capital market fundraisings facilitating the proposed dual listing framework of the Colombo Stock Exchange (CSE) promoted jointly by the CSE and MSE.”

This transaction comes hot on the heels of many other regional transactions carried out by NDBIB involving cross border mergers and acquisitions, and syndicated loans involving both local and foreign financial institutions.