Going public – the MBSL way to raise funds

Relaunching the investment banking business of Merchant Bank of Sri Lanka & Finance PLC (MBSL), its newly appointed CEO, Dammika Hapuhinna, said he plans to expand its Corporate Advisory, Capital Markets and Fund Management services in a more targeted way. The well-known long-established player in the local debt capital markets will focus not only on local debt and equity market but also on SMEs looking for expansion and consolidation.

Pointing to its parent, the State-owned banking giant Bank of Ceylon (BOC) as well as its associate, Lanka Securities Ltd., the long-established stock-broking firm, he said, “MBSL brings an unequalled and a unique mix of financial capabilities to execute any financial strategy smoothly and effectively. Whether its debt or equity or a combination thereof, off or on balance sheet, the strategy and its execution will be value enhancing.”

Over the past 40 years, the investment banking team of MBSL has successfully raised multi-billion rupees through various Initial Public Offerings (IPO) and debenture issues for leading corporates in the country. Its most recent success was managing the IPO of the Co-Operative Insurance Company Ltd. They also managed several Underwriting cases. MBSL has developed and continues to maintain extensive contacts with strategic and financial buyers. These contacts are regularly updated to reflect current views and positions.

Among a host of other criteria, timing is a key component of financial strategy and success. Accordingly, MBSL has developed specialised expertise to advise boards and promoters on optimal timing, valuation, market entry, positioning and structuring for IPOs. Such expertise is available for listed/unlisted debt in the form of debentures or bonds as well as the private placement of equity.

In addition, MBSL provides a host of advisory services. Among them are restructuring services, feasibility studies, project operations, business and company appraisals and similar services covering both the public and private sector.

“We will assign a team to the proposal, actively led by a Senior Transactor to ensure the transaction reaches its fruition as planned,” Chief Manager of Corporate Advisory and Capital Markets Lalangi Goonawardena said explaining the client engagement process.

Given market variability and status of each client, no two deals ever go exactly the same way. Thus, capacity to draw on a wide range of practical business experience, as exhibited by the MBSL Team, when problems and opportunities present themselves, is vitally important, Goonawardena explained.

Structuring a company to go public should be simple and clear to the public. Post-listing, MBSL will continue to support the stock after trading has commenced in the secondary market through research updates, investor forums to explain company performance and timely press releases.

MBSL is a unique institution in the annals of the financial market of Sri Lanka. The pioneer merchant or investment bank in Sri Lanka, it entered the financial sector in 1982 as a majority owned subsidiary of BOC and was quoted on the Colombo Stock Exchange (CSE) in 1991. MBSL is also the owner of the proven stock market index brand, the MBSL MIDCAP Index. In another pioneering move, MBSL constructed the stock market index that measures the aggregate price level and price movements of medium size companies listed on the CSE. The index came into operation in the year 1999. It is revised annually in reference to mid-range market capitalisation, liquidity and profitability of firms to be included in the Index. 

Its Board of Directors include Chairman/Director K. Ratwatte, Senior Director A.M.A. Perera, Director W.P. Russel Fonseka, Director Dr. Nishantha Punchihewa, Director M.P. Ruwan Kumara, Director G.A. Jayashantha, Director J.D.V.N. Jayasinghe, Director H.P.K. Silva, and Director R.M.N. Jeewantha.