Expolanka exceeds expectations!

Friday, 13 May 2011 02:17 - - {{hitsCtrl.values.hits}}

Rs. 2.4 b biggest IPO this year weathers odds and new bank guarantee rules to be oversubscribed by five times as per early count; Final number to be high

In a development that is likely to silence critics and doomsayers, the Rs. 2.7 billion IPO of Expolanka Holdings closed on its official opening day with an initially estimated oversubscription of five times.

It was the biggest IPO for this year and the first since new rules restricting banks with regard to supporting applications via bank guarantees were imposed. The applications were being still counted at the time the Daily FT went to press.

One of Sri Lanka’s few multinationals, the family-controlled Expolanka Holdings offered a near 9% stake of the company amounting to 172 million shares at Rs. 14 via its IPO.

Registrars to the issue, SSP Corporate Services, in an early morning announcement said the IPO was oversubscribed and would hence be closed at 4:30 p.m. yesterday. There was no further announcement.

However, market talk was that as per the count by late last evening, the oversubscription was five times. This means that there had been over Rs. 12 billion worth of applications. The final figure is expected to be higher with over 10,000 applications being received.

Leading up to yesterday, the pricing of the IPO vis-à-vis the price at which the company did a sell-down of shares last year was heavily debated among brokers and investors.

In that context as well as given the big size of the IPO, analysts said that response to the IPO was good.

“It (Expolanka) defied the odds and the success amidst the diverse opinions was commendable,” they added.

Most brokers officially recommended the IPO as buy especially in the medium- to long-term context, whilst many had identified Expolanka as a welcome new listing that would boost the profile and liquidity of the Colombo stock market.