CSE News Updates

By Indika Sakalasooriya

Sri Lanka’s People Leasing Company (PLC), a fully owned subsidiary of state owned banking giant People’s Bank, is bracing for an Initial Public Offering (IPO), which is going to be the second largest IPO so far in the Colombo bourse, Mirror Business reliably learns.

The largest IPO in the history of the CSE up to now has been the share issue of Dialog Telekom— now known as Dialog Axiata—which raised Rs.8.5 billion from the public in 2005. The second largest IPO was Ashok Pathirage’s Softligic Holdings’ IPO which raised just over Rs.4 billion.

Sources close to the upcoming PLC IPO, confirmed that the firm last week made an application to the Colombo Stock Exchange in this regard and is planning to come up with the share issue by the end of October.

Proceedings of the IPO are expected to be utilized to broadbase its capital structure and finance future expansions, sources affirmed.

According to the 2010/11 annual report, PLC has recorded a net profit of Rs.2.6 billion, which is an increase of over 100 percent as the net profit of the previous year stood at Rs.1.1 billion.

The revenue of the PLC group also went up to 10.6 billion against the previous year’s Rs.8 billion.

Additionally the total assets of the company grew steadily and crossed the Rs.50 billion milestone to reach Rs.55.9 billion, a growth of over 80%. The non performing ratio reduced from 2.94% to a mere 1.21% while credit loss provision also recorded a net reversal.

PLC functions as group of companies with six subsidiaries which include People’s Leasing Finance PLC, People’s Microfinance Ltd, People’s Insurance Ltd, People’s Leasing Fleet Management Ltd, People’s Leasing Property Development Ltd and People’s Leasing Havelock Properties Ltd.

The large IPOs that came into the market recently, such as Expolanka and Softlogic did not perform as expected mainly due to pricing of the shares, according to analysts.

“It doesn’t matter how big the IPO is. What matters is the correct pricing. The two large IPOs that came into the market did not care about this factor and as a result they are still lagging below the issue price” an analyst expressing his views over the up coming PLC IPO said.

source - www.dailymirror.lk