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JAT to announce IPO by end-June

09 May 2021

 

  • Eyes expansion into Bangladesh and Africa post-IPO

  • Budget 2021’s tax concession also influenced decision to go public

By Madhusha Thavapalakumar   Joining a few family businesses that announced their Initial Public Offerings (IPOs) at the Colombo Stock Exchange (CSE), JAT Holdings, a leading conglomerate in Sri Lanka, is gearing to announce its IPO by end next month, The Sunday Morning Business reliably learns.  JAT Holdings Founder and Managing Director Aelian Gunawardena, speaking to us, noted that they have completed the required documentation work and submitted it to the Securities and Exchange Commission (SEC) recently.  Mentioning the reasons why the family business decided to go public, Gunawardena noted that the primary factor that influenced them to announce the IPO is the need to tap the potential that the company has at the moment. “Getting our dealers and distributors to be shareholders of the company and expanding further into Bangladesh and Africa are a couple of other reasons behind the IPO. We run the company like a publicly listed company,” he elaborated.  Commenting further, Gunawardena stated that the recent tax concessions announced by the Government are also part of the reason that pushed the company for its IPO.  Announcing the Budget 2021, Premier Rajapaksa, who is also the Minister of Finance, stated that in order to promote the listing of local companies with the CSE, he proposes to provide a 50% tax concession for the years 2021/2022 for such companies that are listed before 31 December 2021 and to maintain a corporate tax rate of 14% for the subsequent three years.  Coincidentally, there has been a galore of IPOs at CSE in recent months, or to be precise, since the announcement of the aforementioned tax relief. A family-owned business, Prime Lands Residencies Ltd., the condominium property arm of Prime Group, recently debuted its IPO proposition.  The company has offered a subscription for 100,000,000 Ordinary Shares at an Issue Price of Rs. 10.40 per share, which is payable in full on application. The company has also facilitated an option to subscribe for a further 87,500,000 shares in the event of an oversubscription of the initial 100,000,000 shares. The opening date is currently set for 11 May, and interested parties are encouraged to forward their applications prior to this. Through this IPO, Prime Lands Residencies Ltd. seeks to allow the public to have a 10-20% stake in the company, and raise Rs. 1.95 billion in funds. Meanwhile, WindForce Limited recently got listed at the CSE as well. WindForce’s IPO offering of Rs. 3.2 billion, the largest IPO announced at CSE since 2011, attracted applications amounting to a value of Rs. 25.7 billion, demonstrating the strong appetite for IPOs among investors in the Sri Lankan stock market, according to the CSE. The company’s IPO for 202,615,341 shares at an issue price of Rs. 16 per share was oversubscribed by eight times on the initial day.  JAT Group’s subsidiaries include Worldwide Resins (Pvt.) Ltd., Brush Masters (Pvt.) Ltd., JAT Global (Pvt.) Ltd., JAT exports (Pvt.) Ltd., and JAT Exports DMCC. JAT has expanded its presence to Ghana, Seychelles, India, the Maldives, Bangladesh, and Pakistan. 


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