Hydro Power Free Lanka IPO oversubscribed

The initial public offering of Hydro Power Free Lanka Ltd (HPFL) opened for subscription on October 26, was closed at 4.30 pm on the same day, due to an overwhelming investor response, which resulted in the issue being oversubscribed by 57 times.

The total applications received, requested for 1.997 billion shares worth a cumulative value of Rs 19.97 billion. The company to be listed on the Main Board of the Colombo Stock Exchange, has offered 32 percent of its equity stake to the public.

The initial offer of 35,000,000 Ordinary Shares at the Share Offer price of Rs 10 was raised so as to promote future growth in the company and accordingly the Rs. 350 million sum raised through the issue would be invested in the construction of 2-4 more mini hydro power plants (MHPs) in Gampola, Kuruwita and Ragala areas in the near future.

The issue managed by the Corporate Finance arm of Taprobane Holdings Ltd., was successfully placed by their placement agent, Taprobane Securities (Pvt) Ltd., who created a sensation by achieving 57.04 times oversubscription or the highest demand of 19.97 billion, which incidentally sparked off the largest interest witnessed of all the IPOs in the recent past.

The IPO launched amidst bearish conditions prevailing in the stock market, drew massive investor appetite and included 43 applicants for the entirety of the 35 million shares, while almost 69 percent of the applications received were for the minimum application of 2,000 shares. The company is buoyant on the success, which by far surpassed their expectations, especially as it was a noteworthy achievement given the minimum expenditure incurred on advertising and promotional expenses.