Janashakthi goes for Rs. 33 m share issue

Will raise Rs. 400 m for expansion:

Hiran H.Senewiratne

The first Initial Public Offering (IPO) after two years of silence will be rolled out by Janashakthi Insurance Co Limited (JICL) to issue 33 million ordinary shares at Rs 12 each to raise Rs 400 million for the company.

It will initially sell 16.5 million shares with an option to double. "The offering will give an opportunity to the public to invest in the IPO while broad base the ownership of the public," Chairman W.T.Ellawala said.

He said Janashakthi has begun a process of change of transformation across all areas of business to serve their customer better. As a socially responsible company Janashankthi will also continue to strengthen its commitment and support to the community in the country.

The manager and registrars to the issue are the Merchant Bank of Sri Lanka Plc Superior service delivery is a significant aspect that Janashakthi has focused on at all times. As a result, insurance products and service were made available in every nook and corner of the country with the extension of the branch network", Ellawala said.

"This listing will be a welcome boost to the insurance sector, which by and large has been illiquid with very few trades. The 33 million shares if widely distributed should dramatically increase trading and give the sector greater visibility and dynamism. The introduction at 7.5 times earning is at a discount to the market and should prove extremely attractive to a wide section of the investor public", he said.

Janashakthi Managing Director Prakash Schaffter said the company is consolidating its position as one of the leading insurance companies in Sri Lanka, JICL registered Rs 525 million profit in 2007 which was the highest profit margin in the industry.

This follows a steady growth in revenue Rs 2.2 billion in 2003, Rs 2.9 billion in 2004, Rs 3.8 billion in 2005, Rs 4.7 billion in 2006 and Rs 5.2 billion in 2007. Therefore, the company has recorded a steady growth in Underwriting contribution which also signifies the stability of the company's core business, he said.

Outlining the company's future plans, Schaffter said that the resultant segregation of ownership from the management was a key factor in JICL growth. "As part of the restructuring process is the strengthening of the Board and the infusion of new blood into the company.

With its inherent financial strengthen and stability, JICL currently enjoys the envitale reputation of having many achievements and having created many industry records in a very short span of time.

The company was the first and only insurer to acquire a state owned insurance company and swiftly went on to become the Sri Lanka's third largest insurance company in the country. They have also many plans to penetrate into the overseas markets as well.