From left: CSE CEO Rajeeva Bandaranaike, People›s Insurance Limited Managing Director D.P. Kumarage,
People›s Insurance Limited Chairman Jehan P. Amaratunga, CSE Chairman Vajira Kulatilaka, NDB Investment Bank CEO Darshan Perera, Acuity Stock Brokers Managing Director Ray Abeywardena and Peoples Bank Head of Treasury and Investment Banking Clive Fonseka at the opening of the trading of People›s Insurance Ltd shares yesterday - Pic by Lasantha Kumara
By Shehana Dain
Peoples Insurance Limited (PINS) yesterday had its debut on the Colombo Stock Exchange (CSE) which marked an important milestone in its history.
Soon after opening, PINS share rose to a high of Rs. 15.60 and dipped to Rs. 14.80 but close at Rs. 14.90, lower from its IPO price of Rs. 15. The overall market dipped by 1.7%. PINS saw around 1.52 million of its shares changing hands via 339 trades generating a turnover of Rs. 22.83 million. PINS market capitalisation on day one was Rs. 2.98 billion.
PIL Chairman Jehan P. Amaratunga was optimistic of the company’s CSE presence, he noted: “We at PIL are very proud to become the latest addition at the CSE. Majority of the shareholders will enjoy the good management and the wealth that will be created. We commit to all our shareholders that we will uphold all their aspirations and we will strive to do our best to get into the S & P index in the near future like our Parent company.”
CSE Chairman Vajira Kulatilka commenting on the IPO said that amid the global slowdown if Sri Lanka can continue to generate positive sentiments continually the CSE will bounce back.
“We need IPO’s like this to give that positive sentiment in the past big IPO’s were always had a huge impact on stock market performance. There are a few small IPO’s up coming in 2016 but the market has to be stable for them to take place. Sri Lanka is a small market unlike big markets we don’t have to be dependent on foreign investors if the local investors get their act together I’m optimistic we can see a positive outcome,” he added.
PINS› Rs. 750 million IPO drew a whopping Rs. 5.2 billion demand reflecting a seven times over subscription in December. The company gave prominence to retail individual investors, employees and mutual funds by giving full allotments. Thus 1526 applications were sent across the board applying for 5.53 million shares which were fully allotted.
In the non-retail investor category, 190 applications for 1.8 million shares of up to 13,200 shares each was allotted in full, the company said via a CSE filing previously. It said there were 390 applicants for 340 million shares who would be given a minimum of 13,200 shares plus 11.5% t of the shares applied for over and above 13,200 shares.
When asked about the company’s stance on stock exchange performance going forward PIL Managing Director D.P Kumarage quipped: “At the moment it’s a bearish market even fundamentally good stocks are being traded at lower price points. At the given circumstances I think we have priced it quite attractively and we have promised that we will distribute 50% of our profits as dividend. So if we go by that aspect if we take next year’s projections it will give a dividend yield of about 9% which could be the highest in the market at the moment.”
PINS is poised to capture more outside business in 2016 apart from the captive market window provided to the company via the customer base in People’s Bank.
The company expects to open three new branches by 2017, bringing the total to five branches. The capital expense per branch is Rs.1.5 million, with four employees per branch. The gross written premium (GWP) per branch is assumed to be Rs.25 million. PIL is aiming to open one new branch per year beyond 2017.