Massive 135 times oversubscription for Singer Finance IPO

Friday, 24 December 2010 01:03 - - {{hitsCtrl.values.hits}}

Final Count: Rs. 400 million issue draws applications worth a staggering Rs. 54 billion

Superimposing the level of confidence both on the issuer as well as future prospect for the stock market and the country post-war, the Initial Public Offering (IPO) of Singer Finance (Lanka) Ltd., had triggered an unprecedented 135 times oversubscription.

As per final figures released by the registrars to the issue, SSP Corporate Services, the Singer Finance IPO worth Rs. 400 million had drawn 21, 897 applications requesting for 3.596 billion shares worth Rs. 54 billion. This response reflects an oversubscription of 135 times. Last week when preliminary figures were released, the oversubscription was slated at 120 times.

The IPO was to raise approximately Rs. 400 million through the issue of 26,666,667 shares to the employees and the general public at Rs. 15 each.

The bulk of the demand for Singer Finance IPO had come from institutional and select high networth investors as there had been 378 applications with payment made by bank guarantee. Their total demand was a staggering Rs. 52.2 billion requesting for 3.48 billion shares. The IPO had also garnered significant retail demand with 21, 519 applications with payments via bank draft and cheques requesting for 115.1 million shares worth Rs. 1.72 billion.

Massive 135 times...

On the latter category alone the IPO had been oversubscribed by 4.3 times whilst as per appetite by the former category of investors the oversubscription is 130 times.

Analysts said the massive Rs. 54 billion demand for Singer Finance IPO was reflective of the attractiveness of the brand as well as the re-rating of scope for financial services and return on equities investments post-war.

“This unprecedented appetite comes soon after the Laugfs IPO which triggered a demand worth Rs. 42 billion. The Singer Finance IPO also confirms the level of bullishness and overall liquidity even though the bulk of it is via bank guarantees,” analysts pointed out.

In a statement following the release of preliminary figures Singer Finance Chairman Hemaka Amarasuriya said: “The overwhelming response to the Singer Finance IPO shows the trust and the confidence placed by the investing public towards the Singer Group and I personally take this opportunity to thank all investors for their support to make this one of the most successful IPOs in the history of the Colombo Stock Exchange.”

“We are privileged to have worked with the Singer Group and play an active role in this record breaking effort which adds to the other records created in the capital market of Sri Lanka by NDBIB through previous IPOs handled by us,” NDB Group Investment Banking Cluster CEO Vajira Kulatilaka said.

NDBIB CEO Darshan Perera said: “The keen interest shown by the investors from the launch of the IPO itself helped the issue to be oversubscribed to this level. With this level of oversubscription the challenge would be to decide on a fair and equitable basis of allotment, where all categories of investors are taken care of.”

The company intends to list the shares on the Colombo Stock Exchange by mid January 2011.