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The 10th Hayleys subsidiary that would be coming up for successful listing, the company will be listed on the Diri Savi Board of the CSE, offering 59.9 million ordinary voting shares to the public comprising of an offer for subscription tranche of 17.9 million shares and an offer for sale tranche of 42 million shares, at Rs. 14 each.
The IPO will open on 6 March this year and is likely to be closed on the same day owing to demand even though the date of closure has been given as 25 March. The minimum subscription has been set at 100 shares or an amount of Rs. 1,400.
The market leader for aluminium extrusions, in 2010 Hayleys acquired controlling interests in Alumex Group, post-acquisition under Hayleys management. Under Hayleys management, the company grew in value and recorded its highest-ever profits in 2013.
Alumex Ltd. Managing Director Rohan Peris noted that the company had experienced a momentous increase in demand for its powder coated profiles in the recent past and at present operates at almost 100% of its existing powder coating capacity.
“The company plans to acquire and operate a new powder coating plant within the first quarter of financial year 2014/2015, which would double the company’s existing powder coating capacity of 1800MT per annum to cater to the said increased demand,” Peris said.
“The funds raised through new shares would be utilised in full and the new powder coating facility would be in operation during financial year 2014/2015.”
Further, it also plans to invest in die manufacturing equipments to cater to the excess demand arising from powder coated profiles. Subsequent to the completion of the new powder coating plant, it is expected that the company’s revenue from the powder coating segment would increase gradually over the years and thereby have a positive impact on the profitability of the company.
The total cost of the powder coating plant together with the die manufacturing equipment is valued at approximately Rs. 240 million.
Hayleys Group Chairman Mohan Pandithage asserted that the group is confident of the growth of Alumex over the next few years to contribute significantly to the group profitability.
“Sri Lankan construction industry has performed on an upward trend and we expect this to continue. With the Government’s vision of 2.5 million tourists in 2016, there is a clear shortage of accommodation for the anticipated tourist arrivals in the country. There are many new hotel projects and various mega infrastructure projects in the pipeline. Undoubtedly Alumex will benefit from this, as all these projects will require aluminium profiles for windows and doors,” Pandithage said.
“Alumex future will be on tapping opportunities on this growth in the construction sector, capitalising on its 50% market share in Sri Lanka.”
With Sri Lanka as its base, Alumex has made entry to capture overseas markets in the region such as Maldives, India, Bangladesh and Myanmar.
NDB Investment Bank is the Financial Advisors and Managers to the Offering while PW Corporate Secretarial is the Registrars to the Offering.
In a statement made to the media, NDB Investment Bank CEO Darshan Perera said: “The Alumex IPO offers an exceptional investment opportunity for potential investors to join hands with the market leader in aluminium extrusions in the country. We are confident that the IPO will be successful despite the challenging market conditions under which it is opening.”
