Trade Finance and Investment said yesterday its Initial Public Offering (IPO) for six million shares was oversubscribed on the opening day.
The IPO at Rs. 20 each was to raise Rs. 120 million. The Company said Rs. 20 million of the proceeds of the IPO will be used to expand the branch network enabling the company to generate more customers and expand its deposit base. The company will also expand its head office in Union Place using 1000 square feet office space adjoining its premises.
The company plans to open two to three branches a year and will begin by opening a branch in Kilinochchi. By doing so it will expand its loan book which is 99 % tied up in the vehicle sector to micro financing aiding farmers who have been resettled in these areas by providing loans at low interest rates.
The company hopes to tie up 70 % of its loan portfolio in the vehicle sector and 30 % in micro finance in the future.
The company will cater to groups of 10 to 12 people through government agents in providing micro finance loans.
Trade Finance and Investment saw Net Interest Income grow 18 % over the same period last year to Rs.41 million in the four months ending July 2011.Profits in this period grew 50 % to Rs.32 million. However, in the year ending 31 March 2011 Interest Income declined 0.04 % to Rs.134 million as interest expenses rose 9 % to Rs.37 million. Profits in the year ended 31 March grew 29% to Rs.63 million. The company’s Net Asset Value per share is Rs.7.90. Annualised Earnings Per share for 2011/12 was Rs.3. The company’s Return on Capital Employed in the FY 2010/11 was 16.4 %. (DG)