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By Chandani Jayatilleke

The Rs.308 million Apollo Hospitals Colombo Initial Public offering (IPO) was oversubscribed by Rs. 100 million on opening, Managers to the issue Hatton National Bank (HNB) told the Daily News yesterday.

The issue was expected to be oversubscribed by Rs. 300 - 400 million at the time of closure at 4.30 pm yesterday.

The overwhelming response received from the public is a clear indication of the enthusiasm of people to invest in profitable instruments. As a result of declining interest rates, people are on the look out for good investment opportunities, HNB Deputy General Manager (Corporate Finance) Duleep N. Daluwatte said.

Responding to a question on the would-be basis of allotment of the shares following over subscription he said: "retailers will be given the full quota and the institutional investors will be allotted shares on a propotionate basis to be determined later.

"Apollo's aim is to offer shares to as many people and have a large base of shareholders. The Apollo management is keen to see that many Sri Lankans will be beneficiaries to the rights of ordinary shareholders as described in its prospectus," he said. Up to 12 noon yesterday we had received 4,700 applications and it was expected to increase to 7,000 at the close. The response from retail shareholders was overwhelming and there were many first-time investors among them.

There was also tremendous response from foreign investors including fund managers from the Middle East and their applications totalled over Rs. 250 million, Daluwatte said. Daluwatte attributed its success to the bank's marketing strategy where the bank used its entire network to promote and market the IPO. "We provided comprehensive information on the issue to people even in the rural areas. I believe that this was the first time that an IPO was taken into such far areas, enabling outstation investors to be part of the issue."

Referring to the impact of the issue on the Colombo Stock Market, he said that this was the first time that three companies have opened IPOs during a particular time framework. Colombo is one of the best performing stock markets at present.

"It has helped enhance the image of the bourse with increased market capitalisation. With the success of the Apollo IPO we hope that more companies would come into the market with the IPOs," HNB Stockbrokers Ltd, CEO/General Manager, Deva Ellepola said. Apollo is an international brand and the hospital authorities have already made a clear announcement to make Colombo the regional hospital in their Group by promoting it in the region. "This will also add value to the hospital sector in Sri Lanka," he said.

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