Expolanka Holdings last week announced the basis of allocation on its Rs. 2.4 billion IPO which was oversubscribed by 5 times drawing near 13,000 applications.

Applicants under retail category will get 100% of their requests whilst the rest will be allotted on the following basis.

Nonretail Category

Shares Applied Basis of Allotment Up to 71,000 100%

71,100 – 4,000,000 71,000 shares + 16.000000% of the balance shares applied. The percentage is applied after deducting 71,000 shares rounded to nearest 100 shares.

4,000,100 – 10,715,000 699,600 shares +4.000000% of the balance shares applied. The percentage is applied after deducting 699,600 shares rounded to nearest 100 shares.

10,715,100 – 26,785,000 1,100,200 shares +3.889837% of the balance shares applied. The percentage is applied after deducting 1,100,200 shares rounded to nearest 100 shares.

26,785,100 and above 2,099,300 shares + 3.285000% of the balance shares applied. The percentage is applied after deducting 2,099,300 shares rounded to nearest 100 shares.

source - www.ft.lk

Midst bearish and challenging market conditions, Asia Wealth Management is recommending investors to pick stocks and IPOs with strong sustainable earnings.

It also said that strong earnings will muscle market momentum going forward.

Last week the Colombo Bourse moved 20.5 points down (WoW) and the MPI dipped 4.45 points down (WoW).

Asia said with the SEC extending the settlement period, many envisaged the market to recover from its “dull” momentum. However, the week ended with the market registering a marginal dip.  “This also could be due to the investors currently/ expecting to lock up cash on Expo IPO, couple of expected big IPO’s and the massive rights issues of HNB and COMB, and also due to retail investors booking profits on the previous week’s gains. Albeit, this liquidity situation in the market, we witnessed healthy quarterly earnings results from the companies,” Asia said.

“This actually is an encouraging point to augment the market momentum. However, the current week was majorly muscled by retail play, mostly concentrating on the mid to low cap stocks. Going forward, we advice the investors to pick on the counters/ IPO’s with strong sustainable earnings. As long as the company earnings are supporting the market the investors should not feel ambiguous,”

Acuity Stockbrokers opined that indices reflected mixed investor sentiments at the bourse last week as it continued to be dominated by retail activities and the absence of major institutional investments.

“With regard to corporate profits, 88% of the counters that have released their quarterly earnings up to now have recorded profits with the Banking, Finance and Insurance sector recording the largest contribution of the total attributable earnings. We anticipate that the present momentum of activities will be maintained during the week ahead,” Acuity added.

source - www.ft.lk

The post-war burgeoning equities market is facing a fresh and mega opportunity this week with the biggest ever IPO in six years worth Rs. 4 billion from fast expanding Softlogic Holdings being available for subscription from tomorrow.

Softlogic’s IPO comes hot on the heels of the successful conclusion of the year to date biggest issue worth Rs. 2.4 billion from Expolanka Holdings (172 million shares at Rs. 14 each). The latter drew applications worth Rs. 11.5 billion reflecting a near 5 times oversubscription.

Softlogic IPO (139 million shares at Rs. 29 each) as in the case of Expolanka’s will be a test to the market and its appetite as per independent analysts.

A test in the context that unlike pre-Expolanka IPOs there is limitations on applications with bank guarantees whilst the other is the sheer size, being the biggest since Dialog’s IPO in 2005.

Most analysts are unanimous in welcoming the listing of Softlogic like they did to Expolanka.

 Two conglomerates are unique on their own right and big in stature though the former is relatively new and aggressive apart from being highly visible with some of the biggest or popular consumer brands under its portfolio.

“These two companies are by far best and biggest names to come to the Colombo stock market therefore the IPOs are healthy developments. They are also solid investments hence very attractive,” a senior broker opined.

Despite equities market having an unprecedented busy run and liquidity-stretched since post war, Softlogic IPO will be sought after. Enormous level of liquidity has been absorbed in equities market on account of Rs. 43 billion via Rights Issues so far this year (on top of Rs. 24 billion in 2010), Rs. 4.6 billion on IPOs (as against Rs. 4.3 billion in 2010) and nearly Rs. 20 billion in private placements since early last year. These are on top high average daily turnover since early last year.

Some analysts have endeavoured to draw parallels in Expolanka and Softlogic’s IPOs.  One is their diversified holding structure and businesses and the other is their dynamic success, proven track record and the future vision. All characteristics make the two most sound for new investors.

Incidentally the Managers and Co Managers to the Softlogic IPO are John Keells Capital and CT Capital, the same combination for Expolanka Holdings issue as well.

Brokers who are not directly involved in the two IPOs said that Expolanka attracted the most mature set of investors who are looking for long-term value. The same will apply when assessing and rating Softlogic as well, they added.

Whilst the common view is that Softlogic IPO despite its bigger value, will be a sellout and will withstand the handicap of restrictions on bank guaranteed-applications as did Expolanka.

The latter faced a major uproar over the big difference in the pre-placement versus IPO price. In the case of Expo it was Rs. 8 or 133% whilst Softlogic’s difference is Rs. 21.80 or 303%. Softlogic raised Rs. 1 billion via a private placement early last year issuing approximately 138 million shares at Rs. 7.20 each.  Via the IPO it will issue around 18% stake of the company.

As in the case of Expolanka, Softlogic’s performance and valuation dynamics too had changed considerably accordingly to independent analysts.

Though the issue opens officially on 9 June so far analysts and brokers who made a hue and cry over Expolanka’s price differences have remained conspicuous by their silence of a higher variation in Softlogic’s pricing. Softlogic’s prospectus will be out on Tuesday after which greater discussion and debate are likely.
Among contrasts are Softlogic listing is on the Diri Savi Board whilst Expolanka Holdings is on the main board of the CSE.

The more objective market analysts expect sanity to prevail in the run up to the mega IPO so that all future investments are assessed on fundamentals than other vested or sinister reasons by doom and gloom-savvy brokers and analysts. It was in this context (midst anti or negative connotations and various wild allegations) and bank-guarantee restrictions that independent analysts and objective brokers commended the oversubscription of Expolanka by 4.7 times.

Certain to be highly recommended by most brokers Softlogic IPO involves 139 million shares at Rs. 29 each.  Funds raised by the company will mostly go to retire the expensive short term debt as well as finance some of the new high growth sector investments.

Softlogic’s expanding business portfolio includes IT, telecom and consumer electronics, healthcare, financial services, automobile, retail and apparel and leisure. Reuters reported recently that Softlogic recorded a more-than six-fold net profit growth of Rs. 950 million in 2010/11 financial year ended on 31 March.

source - www.ft.lk

By Jithendra Antonio

Prior to the much hyped June IPO announcement, Softlogic Holdings (Pvt) Ltd has  unveiled a new look group website to publicize corporate information.

As per the latest updates, Softlogic Holdings has 23 subsidiaries operating under six diversified sectors including IT & Communication, Retail, Automobile, Finance, Travel & Leisure and healthcare.

The company board comprises of Ashok Pathirage, Hemantha Gunawardena, Haresh Kaimal, Ranjan Perera, , Roshan Rasool,Samantha Rajapaksa, Sivakumar Selliah,
Deshamanya Deva Rodrigo and Wathuthanthrige Mahiman Prasantha Lal De Alwis. Four subsidiaries of the company are already listed including Asiri Hospital Holdings PLC (ASIR), Asiri Central Hospitals PLC (ASHA), Asiri Surgical Hospital PLC (AMSL) and Softlogic Finance PLC (CRL), and Softlogic-owned Central Hospitals which is yet to come with an IPO.

source - www.dailymirror.lk