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Sarvodaya Development Finance to be listed today

14 Dec 2021

Sarvodaya Development Finance (SDF) will be listed in the Main Board of the Colombo Stock Exchange (CSE) today (14) and will be classified under the “Consumer Finance – 4020” sector. Accordingly, 149.6 million ordinary voting shares will be listed in the Main Board of the CSE under the security code “SDF-N-0000”. During the initial public offering (IPO) process, 45.5 million ordinary voting shares were allotted at an IPO price of Rs. 22 per share. According to a CSE disclosure dated 2 December, it was announced that retail investors and unit trusts were allotted 100% of shares applied for, while institutional investors were allotted a minimum allotment of 4,500 shares plus 78.6% of the shares applied for over and above the minimum allotment of 4,500 shares rounded down to the nearest 100 shares. The SDF IPO opened on 23 November and was oversubscribed within the day, following which the subscription list was closed. The IPO process intended to offer 45 million ordinary voting shares in two tranches: An initial tranche of Rs. 500 million and a green shoe option of Rs. 500 million to be exercised upon oversubscription. Since the IPO was oversubscribed, a total capital of Rs. 1 billion was raised, which amounted to a 30.4% stake in the company. The primary objectives of the SDF IPO is to satisfy the regulatory core capital requirements of the CBSL and to part-finance the growth in its loan portfolio, which is forecasted to grow at a six-year compound annual growth rate (CAGR) of 24%. SDF had previously successfully carried out a private placement across eight tranches in early 2021, also at Rs. 22.0, which raised Rs. 806 million. Seventy-six percent of the share issue was obtained by Sarvodaya-linked entities; of the remaining 24%, a majority was acquired by external individuals. SDF is a licensed finance company formed in 2010 as the economic arm of the Sarvodaya Movement, which is one of the oldest non-governmental organisations (NGOs) in Sri Lanka. Following the IPO, Sarvodaya Economic Enterprises Development Services (Guarantee) Ltd. will possess a 36% majority share, while Gentosh Total Asset Consulting Inc. Japan will possess a 30% share and the remainder will be with the public.


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