Capital subscribed by 8.5 times

Wednesday, 8 December 2021 00:22 - - {{hitsCtrl.values.hits}}

Issue aimed at raising Rs. 412 m draws applications worth Rs. 3.5 b

Capital Alliance Ltd.’s Initial Public Offering has been oversubscribed by eight and a half times, reflecting strong appetite for the stock.When the Rs. 411.7 million worth issue closed last week, it had received 9,833 applications requesting for shares worth Rs. 3.5 billion. The IPO was for 41.177 million shares at Rs. 10 each.

There had been 9,815 applications with payments made by cheques and fund transfers requesting for 246.6 million shares worth Rs. 2.46 billion.

Additionally there had been 17 applications with payment made by bank guarantee requesting 105.4 million shares worth Rs. 1 billion.

The response confirms Capital Alliance (CALT) IPO as the second most successful in terms of oversubscription after Ex-Pack Corrugated Cartoons which saw an oversubscription by 11 times.

The IPO price per share provided a discount of 18.64% to incoming investors compared to the Rs. 12.29 price per share derived by the independent valuer, Ernst and Young Transaction Advisory Services. CALT also believes that the attractive average dividend yield of 9.65% will encourage investors to hold the share for the longer term.

The proceeds raised via the IPO will be utilised to strengthen the company’s core capital, allowing CALT to expand its investments into a range of specific financial instruments. Capital Alliance Partners is the Manager and Financial Advisor to the issue.

CALT is one of the five non-bank primary dealers in the country. It forms the securities trading arm of the wider Capital Alliance Group (CAL), which deals in an array of Government securities and corporate debt securities.

Established in 2000, CAL is a full-service investment bank in Sri Lanka that caters to a diverse network of family businesses and institutional clientele. Its expertise in capital markets has translated into the services offered to its clients, including Equity and debt advisory, stockbroking, fund management, private equity and securities research services.