Sri Lanka’s RIL Property IPO oversubscribed on opening day
ECONOMYNEXT – A share issue by RIL Property Limited (RIL), the owner and operator of commercial office space in the Sri Lankan capital Colombo, at Rs8 a share was oversubscribed on the opening day Tuesday.
RIL Property offered 120 million ordinary voting shares in the Initial Public Offering to raise Rs960 million.
RIL shares are expected to be traded on the Colombo Stock Exchange during the first week of May subsequent to processing of applications and payment of refunds, a statement said.
“We intend to execute our business plans to cater to the strong demand for commercial office spaces in Colombo and create value to our investors,” said Hiroshini Fernando, chief executive of RIL.
Tthe funds raised are to be used to refurbish an existing building adding approximately 60,000 square feet of Grade ‘A’ office space to the company’s portfolio and to expand the operations of Foodbuzz (Pvt) Ltd, its fully owned subsidiary holding the BreadTalk franchise in Sri Lanka.
A cornerstone investor tranche in line with regional market practices was introduced in the RIL IPO for the first time on the CSE to provide validation on the pricing and manage the success of the IPO, the statement said.
NDB Capital Holdings Limited (NCAP), the cornerstone investor, has committed to subscribe for up to 25,000,000 shares amounting to Rs200 million. NCAP is the parent company of NDB Investment Bank Limited (NDBIB), joint managers to the issue.
“We experienced strong demand for the IPO from value investors in the market,” said Nilendra Weerasinghe, Head – Corporate Advisory of NDBIB.
“The healthy appetite for real estate investments, particularly in the commercial office space segment, resulted in the IPO succeeding despite tough market conditions”.
Sushara Vidyasagara, Chief Manager of the Investment Banking Unit of Commercial Bank, lead manager and underwriter of the IPO, said: “RIL’s growth trajectory, strong track record, the successful development of its flagship commercial office complex Parkland combined with the reasonable valuation that was on offer generated investor interest for the IPO.”
Commercial Bank can subscribe up to a maximum of 37.5 million shares amounting to Rs 300 million.
(COLOMBO, April 4, 2017)