Monday Apr 27, 2026
Monday Apr 27, 2026
Monday, 27 April 2026 00:24 - - {{hitsCtrl.values.hits}}
Janashakthi Ltd., (JXG) has justified the decision to opt for preferential allotment in the ‘non-retail investors’ category in the highly successful Rs. 5 billion Initial Public Offering (IPO), which was oversubscribed by over three times.
The justification and rationale was disclosed in response to a request made by the Colombo Stock Exchange (CSE) following criticism by some investors. Non-retail investors were allocated 325 million shares or 65% of the IPO. This category saw 3,869 applications requesting for 1.2 billion shares.
JXG said the IPO was the largest IPO in the previous 14 years, and was therefore aware of the importance of ensuring its success, not only for its own benefit but also from broader public sentiments of the market.
It said when approval was sought for the IPO in or around early February, market sentiment was hugely positive, as reflected by the level of transactions and volumes on the share market at the time. However, following finalisation of the IPO, there was a drastic shift in market sentiment due to the ongoing events in the Middle East, leading to grave concerns on the eventual success of the IPO.
In the circumstances, the company was compelled to proactively premarket the issue, particularly with local and foreign investors. These investors agreed to make firm commitments to apply for substantial subscriptions provided that they had reasonable assurances of receiving allocations based on their pre-commitments.
“Since the company had a responsibility to take all reasonable measures within the Listing Rules of the CSE to ensure the eventual success of the IPO, it made such commitments based on practical considerations,” JXG said.
Separately, some analysts also questioned whether the ‘non-retail investors’ and employee categories (which saw the allocation of 50 million shares via 214 applications) are subject to a minimum holding period of shares allotted under preferential terms. This poser was following the three-times oversubscription of the JXG IPO and most of the retail investors losing out on the allotment. The retail category (applying for less than 20,000 shares) received only an allocation of 75 million shares despite demand being 166 million shares via over 16,000 applications.
According to company sources, the management has had no formal agreements with non-retail investors, though the understanding of the holding period is likely to be 12 months by most. In terms of employees, there is no holding period but they will be subject to any blackout period in the case of undisclosed information.
