Rs. 747.6 m Agarapatana Plantations IPO draws applications worth Rs. 1.47 b

The Agarapatana Plantations Ltd., Initial Public Offering (IPO) has been oversubscribed by two times drawing nearly 3,000 applications.

The IPO involved 83,070,111 Ordinary Voting Shares at Rs. 9 each or Rs. 747.6 million. The quantity of shares amounts to 16.61% of the post-issue Ordinary Voting Shares. The Net Asset Value per share of the Equity (NAV) is Rs. 8.43 and the Offer Price was 1.07 times the NAV.

The company said the value of shares applied amounted to Rs. 1.47 billion (164.17 million shares) via 2,970 applications.

There had been 1,490 applications with payment via RTGS/SLIPS/CEFTS transfers requesting for 24.7 million shares worth Rs. 222.7 million. Payments via bank drafts and cheques amounted to 1,468 applications requesting for 70.68 million shares worth Rs. 636.15 million. The IPO also drew 12 applications with payments via bank guarantees with requests for 68.7 million shares worth Rs. 618.68 million.

Retail investors

As per the basis of allocation, all retail individual investors who applied in the Retail individual Investor category to be allotted in full. Applications amounting to 17.54% of the issue were received from Retail individual Investors and all applications were allotted in full.

Unit Trusts 

The Unit Trust investor Category was oversubscribed and 23.80% of the total issue was allotted to the Unit Trust Investor Category using the unsubscribed component of the Retail Individual Investor Category.

Employees and Directors

All investors who applied in the Employees and Directors category for less than or equal to 2,000,000 shares to be allotted in full

b. All investors who applied in the Employees and Directors category beyond 2,000,000 shares: allotted 2,000,000 shares and 94.881544% of any shares applied over and above the said 2,000,000 shares with the number of shares arising from such calculation being rounded off to the nearest one hundred (100) shares.

Non-Retail

a. In terms of the Section 1.9 of the prospectus dated 14 July 2023, the Board of Agarapatana Plantations has made preferential allotments to certain identified investors (e.g. Foreign/Local Institutional Investors, and other High Net Worth Individuals) identified by the Board for up to 28.66% (23,810,700 shares) of the total number of issued shares. The quantum of shares unsubscribed post allocating to the Retail Individual Investor Category and the Unit Trust Investor Category has been allotted preferentially to arrive at the aforesaid allotment of 28.66%.

b. All other investors who applied beyond 11,100 shares: allotted 11,100 shares and 21.173558% of any shares applied over and above the said 11,100 shares with the number of shares arising from such calculation being rounded off to the nearest one hundred shares. 20% of the total issue has been allotted to the Non-Retail Investor category for which no preferential allocation is given.

Funds raised via the IPO are for investment in modern equipment to develop APL factories to “State of the Art – Processing Centres” (Rs. 672.6 million) and settlement of high-cost term loans worth Rs. 75 million.

The Lankem Developments PLC is the Parent Company of Agarapatana Plantations holding 67.45% of the issued share capital whilst related parties are also shareholders.

The company specialises in the cultivation, manufacture and sale of high-quality tea. APL is one of the few mono-crop companies in the plantation sector, with all of the tea extent located in the “High Grown” districts of Nuwara Eliya and Badulla, which fall within the Western and Uva High elevation categories.

The company has plantations located in the Agras valley and Uva regions in Sri Lanka. Properties held by APL include historical properties like Dambatenne Estate situated in the Badulla district in the Uva Province of Sri Lanka and ranges in elevation from 1,509 m to 1,936 m above sea level. Dambatenne is intrinsically linked to the history of Ceylon Tea. It was instrumental in the building of the Lipton Tea Empire and, by association, the legacy of Ceylon Tea. Sir Thomas Lipton acquired the property in the 1890s owning it until his demise in the early 1930s. The teas are sold under the “Bandara Eliya” garden mark and are still sought after as in the days of Sir Thomas Lipton.