Sri Lanka’s JF Packaging IPO heavily oversubscribed hours after opening
The Morning: Generating active and broad-based interest from investors, the Initial Public Offering (IPO) of Ordinary Voting Shares of JF Packaging Limited, was heavily oversubscribed within hours of its opening at 9.30 a.m. on 3 October. Accordingly, the offer was closed at 4.30 p.m. on the same day.
A total of 51,724,144 Ordinary Voting Shares of JF Packaging Limited were offered to the public at an Issue Price of Rs. 11.60 per share, with the Company seeking to raise Rs. 600 million through public investment, and a listing on the Main Board of the Colombo Stock Exchange. However, the Company received total subscriptions worth Rs. 3,785 million, resulting in the offer being oversubscribed by a factor of 6.3 times.
Expressing gratitude on behalf of the company JF Packaging Limited Managing Director K.P. David said: “This is a landmark milestone for JF Packaging, and we extend our heartfelt thanks to all investors who have placed their confidence in us by becoming stakeholders. We are humbled by the overwhelming response, and regret that we cannot allot the full amount subscribed to every applicant. We will ensure that the allotment is conducted in a fair manner and in accordance with the basis disclosed in our Prospectus. We reaffirm our commitment to delivering on our stated objectives and creating exceptional value for all stakeholders in the months and years ahead.”
The stated objectives for the capital raised are as follows: Rs. 439,464,493 to settle term loans and Rs. 160,535,577 to partially settle outstanding working capital loans thereby reducing finance costs, strengthening the balance sheet, and enhancing cash flows.
OSL take:
The oversubscription of stocks of many local businesses that are listed indicates the growth and strength of Sri Lanka’s private sector as well as the country’s overall economic resilience. Over the years, Sri Lanka’s economy has shown great resilience and strength in the face of external and internal economic shocks, with the most recent being the unprecedented economic crisis faced by the country in 2022. The quick turnaround by the country and the growth trajectory at present has boosted confidence among many foreign businesses/investors in Sri Lanka’s economic resilience. Sri Lanka is currently engaged in a development programme in line with the country’s target of becoming a regional hub, which in turn has opened many business/investment opportunities for foreign businesses/investors. These business/investment opportunities also include partnerships/joint ventures with local businesses that are engaged in expansion programmes locally and internationally. Sri Lanka’s private sector also has many lucrative business ventures for foreign businesses/investors that are on the lookout for opportunities in the region, especially in Sri Lanka.
| Article Code : | VBS/AT/20251117/Z_2 |