Sweden-based Tundra fund doubles stake in renewable energy giant WindForce

•  Buys 2.5% stake for over Rs. 600 m, increasing holding to 5.5%
•  Existing major shareholders Akbar and Hirdaramani too pick up more quantities as original shareholder Star Pack Investments exits with tidy profit
•  106.5 m shares of WindForce trade for Rs. 1.94 b, accounting for 49% of CSE’s total
•  WindForce triggers a rare net foreign inflow to stock market

Sri Lanka’s largest renewable energy company and one of latest CSE debutants, WindForce Ltd., yesterday saw a further vote of confidence by a foreign fund – Tundra – as it doubled its stake to an estimated over 5% with an investment of over Rs. 600 million.  The Colombo stock market saw 106.5 million shares of WindForce trade for Rs. 1.94 billion, accounting for nearly 50% of the day’s turnover. The stock went through 641 trades before closing at Rs. 18.80, down by 20 cents. Of the shares traded, 71.3 million were executed via six crossings.

Daily FT learns Sweden-based global asset management company Tundra Fonder’s Tundra Sustainable Frontier Fund, picked up 2.5% stake in WindForce. 

NDB Securities said foreign holding of WindForce increased by 33.8 million shares whilst Asia Securities put net buying into WindForce at Rs. 636.8 million yesterday. 

Two major shareholders and Co-Founders – Akbar Brothers and Hirdaramani Group – had been on the buying side as well yesterday. On Tuesday, Akbar Brothers bought 2.4 million shares of WindForce at Rs. 19 each.

 Akbar Brothers and Hirdaramani held 38.85% and 24.32% respectively as of 31 March.

Yesterday’s seller was one of the original shareholders – Star Pack Investments Ltd., which as of 31 March held 107.4 million shares or 9.36% in WindForce. Sources said Star Pack has exited WindForce booking a tidy capital gain. 

Tundra Sustainable Frontier Fund entered WindForce via the latter’s highly successful and landmark Initial Public Offering at Rs. 16 per share in March. 

Soon after the original investment, Tundra Fonder Founder and Chief Investment Officer Mattias Martinsson termed WindForce as a “pretty amazing company” emphasising the firm’s diversified sustainable energy portfolio. It was also the fund’s first Sri Lanka IPO investment. 

The fund noted that WindForce met its three basic criteria with flying colours, which includes structural growth, strong corporate culture and management as well as clear societal benefits.

“At our meetings, we were impressed by both the strong ownership base with a number of Sri Lanka’s most reputable companies on the list of owners, and we were very impressed by the company management that has taken the company to its current position over the past ten years,” the Fund said in its March monthly report. Further, the Fund also found the listing price-to-earnings ratio of WindForce to be very attractive given the nature of the business and future growth prospects.

Analysts estimate Tundra’s exposure to Sri Lanka listed equities to be around 8% or 9%.

WindForce’s 202.6 million shares or Rs. 3.2 billion IPO, the largest since 2011, was oversubscribed by eight times, attracting 1,654 applications worth Rs. 25.7 billion. 

Early this month, WindForce announced its first interim dividend for FY22 of 75 cents per share with a pay-out of Rs. 1.03 billion. The move meant a return of 4.7% to shareholders. 

In FY21, WindForce posted a consolidated revenue of Rs. 4.5 billion, up by 30% from FY20. Pre-tax profit grew by 5% to Rs. 2.48 billion and after-tax profit (PAT) improved by 10% to Rs. 2.07 billion.