Janashakthi Limited has issued a formal response to the Colombo Stock Exchange (CSE) addressing recent criticisms regarding the basis of share allotments to ‘non-retail investors’ following its latest Initial Public Offering (IPO).

The Janashakthi IPO was a landmark event for the local capital market, valued at over Rs. 5 billion, making it the largest IPO on the CSE in the last 14 years. The company emphasised that the success of the issue was critical not only for the firm but also for broader market sentiment.

According to the official announcement, market conditions were “hugely positive” when the IPO was initially approved in early February. However, a “drastic shift” in market sentiment occurred following the finalisation of the IPO, primarily driven by ongoing events in the Middle East, which created significant concerns regarding the offering’s success.

To mitigate these risks, Janashakthi Limited engaged in proactive pre-marketing of the issue to both local and foreign investors. These investors provided firm commitments for substantial subscriptions, provided they were given reasonable assurances of receiving allocations based on their pre-commitments.

The company stated that these preferential allotments were made based on practical considerations to ensure the IPO’s success while remaining within the Listing Rules of the CSE. The clarification was issued on 24 April, following a request by the CSE to address public concerns.