Lanka Orix Finance joins parent in top 20 league on debut

Lanka Orix Finance yesterday zoomed straight into the league of top 20 most valuable companies on its maiden trading day.

The finance company coming to CSE via introduction and a reference price of Rs. 5 per share, finished the day with a 152% or Rs. 7.60 gain to close at Rs. 12.60. It peaked to a high of Rs. 22.50. With 2.8 billion shares in issue at Rs. 22.50 its market capitalisation was a staggering Rs. 63 billion, momentarily rocketing itself as the 8th most valuable stock ahead of its parent pioneering leasing firm turned diversified holding LOLC (ranked 11th) as well as above long standing giants such as HNB, Spence and Distilleries.

Its closing price brought Lanka Orix Finance to finish the debut at the 17th place ahead of diversified CT Holdings and Hayleys and Central Finance.

Overall LOFC saw nearly 19 million of its shares change hands via 6,424 trades generating a turnover of Rs. 304.2 million, the single largest for the day. This was in addition to topping the list of percentagewise gainers.

In April this year, Lanka ORIX Leasing Company PLC (LOLC) sold 10% of its 100% holding of LOFC to investors in order to comply with the minimum requirements of the Colombo Stock Exchange to be listed as required by the Central Bank of Sri Lanka (CBSL).

LOFC is one of the largest Registered Finance Companies (RFC) in the country with a lending book of Rs. 20.76 bn, and a deposit base of Rs. 17.39 billion as at 31 March 2011.

 In June this year the deposit base reached Rs. 20 billion with the company being able to source over Rs. 3 billion worth of fixed deposits and savings accounts in both rupees and foreign currency during this quarter. LOFC is the only RFC in the country with CBSL approval to offer foreign currency savings and fixed deposit products and engage in inward worker remittances.

LOLC changed its strategic direction and moved towards a diversified conglomerate. Its request from CBSL not to renew its leasing licence early this year was approved which assisted in completing this transition. This was in line with LOLC’s strategy of diversification of its strategic investments into sectors other than the traditional financial services business it was known to be involved in. With this strategic move, LOFC benefits from the large book of SME business carried out by LOLC and also the extensive footprint developed by LOLC over a period of time. LOFC operates from more than 50 service points reaching all parts of the country including a significant presence in the North and the East. LOFC branch network is fully equipped to handle all financial needs of the high net worth customer to the micro customer with a wide range of financial products covering leasing, hire purchases, loans, working capital loans, savings, fixed deposits, insurance, margin trading and worker remittance etc.

LOFC has performed extremely well since it commenced business in June 2003 and has expanded its deposit base rapidly, over 70% growth seen in the last financial year. Disbursement of lending too saw exponential growth over the year, with 134% growth seen during the year ended 31 March 2011. The company recorded PBT of Rs. 1.49 bn, a 649% growth over last year. The corresponding PAT was Rs. 1.25 bn with 1229% growth over the previous financial year.  

LOFC is led by an eminent Board of Directors, with Rohini Nanayakkara as the Chairperson, Ishara Nanayakkara as Deputy Chairman, Brindley De Zylva as Managing Director together with Kapila Jayawardena, Kalsha Amarasinghe, Rajan Asirwatham, and Dr. Harsha Cabraal functioning as directors.