Sri Lanka’s Hela Apparel Holdings Rs. 4 billion IPO sets new milestones, oversubscribed by 5.4 times
Daily FT: Hela Apparel Holdings made history this month with the successful oversubscription of the largest initial public offering (IPO) in the past decade.
The IPO, which sought to raise Rs. 4 billion through the issue of new shares, was oversubscribed by 5.4 times and received applications amounting to Rs. 21.8 billion.
It received 23,205 applications from investors, a record number for any IPO in the past 10 years.
The offering was well received by a range of investors, including foreign, institutional, local high-net worth and retail investors, and was oversubscribed in all investor categories. 15,706 applications worth Rs. 3.1 billion were received through the online application portal alone, yet another new record.
Having successfully raised its target of Rs. 4 billion, Hela now looks to the future as it gears up to set further milestones.
Expressing his sentiments, Hela Apparels Holdings Chairman A.R. Rasiah said: “As a social capital-focused company, we are honoured and humbled to have the trust of the Sri Lankan people. We have already started on the work that we believe will give Hela a competitive advantage in the long term. We thank everyone for their participation in this IPO and welcome them to join us on a journey of global value creation.”
Jointly managed by CT CLSA and CAL, the issue witnessed a 20.5% stake in the company, or 267,108,998 ordinary voting shares being offered to the public at a per share price of Rs. 15.
The proceeds of the IPO are intended to be channelled towards boosting supply chain security through an investment in a fabric mill, strengthening core digital systems through the implementation of a new ERP system, productivity-enhancing capex, and strengthening the company’s balance sheet to support its global expansion strategy.
Hela is guided by an experienced and diverse management team and operates across six countries of origin, while generating revenues exclusively in dollars.
The record over subscription of Sri Lanka’s Hela Clothing IPO is indicative of the growing investor confidence in local business ventures. It also indicates the strength and growth of the country’s private sector as well as the overall expansion in economic activities despite facing pandemic challenges. Sri Lanka is engaged in an aggressive development programme and is working towards positioning itself as an emerging business destination in the South Asian region. The country’s geographical positioning in the Indian Ocean, the many trade agreements as well as concessions enjoyed by the country and the ease of doing business environment have all helped boost Sri Lanka’s attraction as a growing business destination. Amidst the Covid 19 pandemic, several key economic sectors in the country have recorded positive growth rates while the private sector recorded profits. All these movements have resulted in the expansion of business/investment opportunities in Sri Lanka.
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