Janashakthi announces basic allotment

On the advice of Merchant Bank of Sri Lanka PLC, the Board of Directors of Janashakthi agreed to proceed with the initial public offer in June 2008.

During the time span between the decision for the IPO and actual issue, Janashakthi strengthened its organisational pillars - corporate governance, transparency and accountability towards achieving a sustainable growth to yield its long-term objective of being a premium insurance company in the industry.

In light of the advice, independent non executive directors of repute were appointed, financial accounting and reporting framework was enhanced, greater controls on the business matrix were adopted by recruiting professionals for key positions and value cultures were established to enhance the company's business model.

This shifted the value drivers of the organisation towards a more transparent environment boosting the corporate investor confidence, while the inherent corporate image and brand reputation attracted most of the retail investor base.

MBSL was concerned on the timing of the issue considering the weak macroeconomic fundamentals and lull market conditions. Nevertheless, the pricing formula adopted and investor education sessions held entailed the IPO to be oversubscribed by 4.5 times on the initial tranche.

Besides, the return on investments in past by way of splits, bonuses and dividends boosted the mindset of existing shareholders and potential investor confidence given the recent financial performance of the organisation.

MBSL was also concentrated on placing the issue on the Colombo Stock Exchange. As such, the Main Board and the Second Board rules and regulations were evaluated in view of Janashakthi's long-term aspirations in the market place and the second alternative was opted for.

Our knowledge and experience too facilitated the success of Janashakthi's IPO.