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The public has already shown a tremendous enthusiasm in the three proposed IPOs opening this week and all three IPOs are expected to be oversubscribed, according to market analysts.

The three listings Apollo Hospitals, Sri Lanka Telecom and Tess Agro will enhance the image of the bourse with increased market capitalisation. The three issues together will raise nearly Rs. 4 billion, they said. As far as the investors are concerned the issues will be attractive and the timing of IPOs is also favourable considering improved company performances reported so far this year, the analysts said.

Apollo Hospitals Colombo

The first of a series of three IPOs to be issued will be the Apollo issue of 20,554,967 shares at Rs. 15 to the value of Rs. 308 million.

The objective of the issue, according to hospital authorities is to finance the latest state-of-the-art of medical equipment purchased on supplier credit as well as to increase the bed capacity of the hospital. The proceeds of the IPO are expected to be used in financing of medical equipment - Rs. 288.4 million and expansion of bed capacity Rs. 19.9 million.

Sri Lanka Telecom

Sri Lanka Telecom Limited (SLT) will open Rs. 3.25 billion Initial Public Offering (IPO) which is branded as the biggest offering so far on November 28. Valued at Rs. 15 per share, the IPO will constitute an Offer for Sale by the Government of a 12% stake in SLT amounting to 216 million shares. The Government may also at its discretion sell up to a further 3% stake amounting to 54 million shares in the event of an over-subscription of the IPO. While the official opening date is November 28, applications will be accepted from the public commencing November 15, a Telecom official said. The issued share capital of SLT is 1,804 million shares. The present share holding of the company is the Government (61.5%), NTT Communications Corporation (NTT Com) (35.2%) and employees/others (3.3%). At the conclusion of the IPO the Government shareholding will drop down to 49.5% (or 46.5% in the event the over-subscription option is exercised in full), the official said. The IPO is managed by DFCC Bank. DFCC Bank is also joint financial adviser to the company together with UBS Warburg. Legal advisory services are provided by Julius & Creasy with Clifford Chance acting as counsellors to the company on English law. Bank of Ceylon will be the banker to the issue and the registrar's function will be performed by SSP Corporate Services. The Offering represents the second phase of SLT's privatisation with the first stage having taken place in August 1997 when a 35% equity stake was sold to NTT of Japan along with management control.

Tess Agro

Tess Agro, a leading exporter of fruits, vegetables, seafood and other perishables will open its IPO of Rs. 25 million on November 21. The offer will include 2.5 million ordinary shares of Rs. 10. Merchant Bank of Sri Lanka Limited, the managers to the IPO is confident that the issue will be oversubscribed, mainly due to heavy interest currently prevailing for IPOs.

Tess Agro, a BOI company with 15-year tax holiday is the largest exporter of agricultural produce to the EU from Sri Lanka. The company is also in the business of hiring cold storage and reefer containers for exporters and importers. Being a pioneer in this field, the company operates a 'cold chain service' including pre-cooling, cold storage and refrigerated transport through its 20 reefer containers to the perishables industry.

The company has also invested in a deep sea venture - Tropic Fishery (Pvt) Limited which completed its first full-year operations this year with an export turnover of over Rs. 1 billion. Tropic Fishery exports to the EU market catering to clients such as Tesco, Sainsbury's and Marks and Spencer and Sashimi market in Japan. The IPO was officially launched at the Trans Asia Hotel on Friday.

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