- Capital Alliance’s 5-Year Optimum Fund units listed on 1 Feb.
- CSE anticipates surge in IPOs in 2Q 2024
- Identity of 4 companies seeking capital through IPOs confidential
- CSE advocates for reinstatement of tax incentives to boost IPO interest
The Colombo Stock Exchange (CSE) is currently processing applications for four Initial Public Offerings (IPOs) which are expected to enter the market within the first half of 2024.
Speaking to The Sunday Morning Business, CSE Chairman Dilshan Wirasekara revealed that there had already been two listings on the Colombo bourse in 2024, which included the introduction of Capital Alliance Ltd.’s Five-Year Optimum Fund units to the market on Thursday (1).
He further revealed that applications had been received for four IPOs which were currently being processed and would most likely enter the market within the first half of 2024.
However, he declined to reveal the identity of the four companies which were seeking to raise capital on the CSE by way of IPOs.
Commenting on the possibility of further IPOs in 2024, he stated: “I think we will see more IPOs in the second half of 2024. Right now the markets are not conducive. We will not see the levels of interest shown in 2021, when there were tax incentives.
“Many of the companies that listed then did so for the specific tax advantage. There is no tax advantage being offered at present. We will only see those who are genuinely interested in listing, so the IPO levels this year will be lower than those observed in 2021.”
He further stated that the CSE had continuously lobbied for the recommencement of the tax incentives offered to companies in 2021, which were abruptly revoked by the Government in 2022 following the economic crisis. However, a positive response is yet to be received from the Government in this regard.
Over the period from mid-2020 to 2021, the Colombo bourse saw a significant uptick in market activity as new retail investors entered the bourse following the digitalisation of the CSE, resulting in the benchmark All Share Price Index (ASPI) reaching its all-time high of 13,462.39 on 19 January 2022.
Amidst this bull market, the raising of capital through equity markets was in vogue, particularly in 2021, which saw the CSE record 28 IPOs, the second highest figure recorded in the history of the CSE, behind only 2011 and 2013 when the CSE recorded 30 IPOs each year.
Out of the 28 IPOs in 2021, 14 were debt IPOs, 13 were equity IPOs, and one was an equity introduction IPO. All 13 of the equity IPOs were oversubscribed within the opening day.