He added that these foreign funds have given a positive response and are expect to receive commitments shortly. When asked about why PLC didn't follow the usual practice in attracting private equity, Mr. Kumarage said that the company felt that there was no need for a private placement as it was mainly intended for a preferred allotment.
"We achieve the same objective through our preferential allotment category in the IPO (30%) of the issue. The investors targeted here are the ones with medium to longer term time horizons who would provide the price stability," Senaka Kakiriwaragodage, Head Capital Markets, NDB Investment Bank, the Joint Managers to the issue told the Business Times, also on the sidelines of the IPO launch. He added that there's no direct allocation for foreign investments and they can apply for all categories other than the unit trusts and employee category.
"The 30% discretionary allocation will be predominantly allocated to foreigners as per the intention of the management, but foreigners can also apply under the non-retail category should they not be considered for discretionary allotment," another official told the Business Times.
When asked what the challenges/chances are in launching PLC IPO at this time, when no one comes to the CSE, he explained that investors stay out of the market for several reasons ranging from lack of suitably attractive stocks and lack of adequate liquidity are among them. He was hopeful that PLC stock would provide both these to a potential investor. "The attraction of new investors to the market, particularly foreign, may lead to the revival of the market and we think PLC IPO could boost the entire market as it may bring Sri Lanka to the limelight of many foreign investors again," he noted.
While noting that the industry growth would rely on factors such as per capita GDP and currently low private sector credit to GDP, he added that both these parameters are expected to grow significantly where the finance/leasing sectors will be a key beneficiary.