Capital Alliance Holdings announces Rs. 1.575 b IPO

CAL Group CEO Kanishke Mannakkara (second from left) gestures during the media briefing on the upcoming IPO. Others (from left): CAL Chairman Dinesh De Zoysa, Chief Strategist Udeeshan Jonas and Senior Vice President/Head of Equity Capital Markets Ashvanth Vijayaram – Pic by Upul Abayasekara

• First IPO on the CSE this year to open on 8 May
• IPO lists 7.6% of its stake, equivalent to 157.5 million shares, and at Rs. 10 each
• CAL Group CEO Kanishke Mannakkara says half of IPO proceeds will be utilised to fund CAL’s expansion into Kenya and eventually other markets
• CAL Chairman Dinesh Ajith De Zoysa notes remaining funds will be utilised to accelerate digital investment, retail investment, and drive investment banking solutions

 By Janani Kandaramage  

Capital Alliance Holdings

Ltd.’s (CAL) Rs. 1.575 billion Initial Public Offering (IPO), one of the landmark initiatives of the company, is set to officially open on 8 May, marking the first IPO on the Colombo Stock Exchange (CSE) this year. 

Under the theme ‘Building Wealth-Bridging Markets,’ the company’s IPO will list 7.6 % of its stake, equivalent to 157.5 million shares, on the Main Board of the CSE. The shares will be offered at Rs.10 each, representing a 21% discount compared to the company’s September valuation of Rs.24 billion. Following the IPO, the company’s market capitalisation is projected to reach Rs. 20.7 billion.

Nearly half of the IPO proceeds will be utilised to fund the CAL expansion into Kenya, which is targeted to materialise within a one-year period.

“We are looking to enter Kenya, using Nairobi as a gateway to East Africa, because it serves as a regional financial centre. When we set up in Kenya, we will be covering 250 million people and a cumulative GDP of about $ 650 billion,” CAL Group CEO Kanishke Mannakkara stated, adding that, “We are also exploring two additional frontier economies that meet our criteria, aiming to expand into markets with a combined GDP of around one trillion dollars and reach nearly 500 million people. That’s the growth story — scaling up to ten times Sri Lanka’s GDP and serving a population 20 times larger than our own.”

CAL’s IPO also supports its mission to democratise financial growth by leveraging technology to make capital markets more accessible to retail investors. 

With 25 years of experience and over Rs. 250 billion in assets under management, CAL’s pursuit of frontier market expansion through this step is poised to scale its full-spectrum investment banking model into advantageous markets beyond Sri Lanka.

“Our ambition extends far beyond the local economy, and our purpose is to create wealth by unlocking the power of capital markets in these places. We are taking the lessons learned from Sri Lanka’s long history with capital markets and applying them to a larger international canvas,” Mannakkara reiterated. 

In the present, CAL’s prime focus revolves around acquiring an existing fully licenced capital market service provider in Kenya that holds an investment banking licence, stockbroking licence and primary dealing licence, according to the prospectus. 

Dinesh Ajith De Zoysa emphasised that if a comprehensive capital market service provider is not accessible, CALH will look into acquiring companies that offer one or more of these services and will subsequently seek the additional necessary licenses.

He noted: “The estimated duration for completion, including the regulatory approvals, is approximately four to five months. If a suitable acquisition cannot be identified or successfully completed in this estimated timeline, CALH will consider setting up a new entity.

Commenting on the usage of any remaining funds, De Zoysa said these will be utilised to drive the retail investment reach and digital investment. 

He described that CAL’s growth strategy is centred on three pillars: expanding into frontier markets, followed by technological integration into investment banking and an emphasis on innovative investment banking solutions. 

CALH is the largest non-bank primary dealer. It’s also the second largest stockbroker and the second largest asset manager. Further, CALH is the fastest growing investment bank in Bangladesh. With over 40,000 customers and $ 800 million assets under management, CALH is the largest investment bank in Sri Lanka, across all four sectors in which it operates. 

Its digitised ecosystem already offers seamless access to stockbroking, unit trusts, government treasuries, and research insights to over 34,000 clients.