Prime Lands Residencies’ Rs. 1.9 b IPO fully oversubscribed

Prime Lands Residencies’ Rs. 1.9 billion Initial Public Offering (IPO) was fully oversubscribed yesterday, leading a successful conclusion reflecting strong investor confidence both in the company as well as the prospects for the real estate sector. 

The IPO was aimed at raising Rs. 1.9 billion, with 100 million shares at Rs. 10.40 raising Rs. 1 billion as the first tranche, with an option to issue a further 87.5 million at the same price bringing the total to Rs. 1.9 billion. The stake offered was 20%.

The first phase of Rs. 1 billion was oversubscribed on its opening day on Tuesday and as per the prospectus the IPO had to be kept open for an extra day given the second tranche option.

The IPO’s manager and financial advisor Acuity Partners confirmed that the Prime Lands Residencies IPO was closed yesterday after successful conclusion of both first and the second tranche. Acuity described the IPO success as “significant” and augurs well for Prime Lands Residencies and the Colombo Stock Exchange.

Investors of Prime Lands Residencies IPO stand a dual benefit from the growth of both the real estate market and the share market, which has also seen highly positive growth forecasts over the turn of the year – having secured returns after investing in a reputed, reliable company such as Prime Lands Residencies. 

Much to the benefit of the investors, Prime Lands Residencies had offered the IPO at a 40% discount allowing investors to reap a significant capital gain. 

The company also stated that investors will be eligible to avail a significant dividend pay-out of 40% from the profits at the end of the financial year 31 March 2021 of Rs. 975 million profit after tax, within a few months of the listing.

Prime Group is not new to the equity market or to the share market. The company’s 39% stake in HNB finance and the 88% stake in Prime Finance are already well known in the stock market. Prior to the IPO, the company was under sole ownership. 

Commenting on this landmark achievement for Prime, Chairman Premalal Brahmanage on Tuesday said: “Today is a day that means many things to us at Prime Group. The oversubscription tells us that the public’s interest for our shares far exceeds the available supply. We have achieved excellence in the eyes of the public as they have recognised our solid financial performance. 

“The over subscription is a tremendous achievement given the current pandemic situation. This speaks well of the organisation and its impression in the financial market and further booms the share market with a positive outcome. We commend and thank our investors for making a wise investment with Prime Lands Residencies. I want to say that we recognise the importance of meeting shareholder expectations, and delivering long-term shareholder value, which is fundamental for a listed company and furthermore we believe that together with investing public, we can continue to shape the nation’s horizon,” Premalal added.

Prime is a well-respected brand name in Sri Lanka and Prime Group is the first and only Sri Lankan real estate group to secure an issuer rating of (SL)A- from ICRA Lanka. Prime Lands Residencies Ltd. was created in 2016 by amalgamating Prime Homes International, Prime Homes Ltd. and Living Homes Ltd. to focus on envisioning, creating and selling affordable luxury housing projects in the main cities around the country, under the brand name ‘Prime Residencies’ together with high end and ultra-luxury condominiums such as The Grand Ward Place Colombo 7, located in the heart of the Colombo.