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| Sunday, 28 September 2003 |
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| News Business Features Editorial
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Hemas announces IPO share allocation procedure The Directors of Hemas Holdings Ltd have announced a formula to allocate shares for the applicants of the Initial Public Offering (IPO). All valid applications would be satisfied to some extent. The minimum allocation would be 100 shares and the allocation thereon would be on a progressively reducing scale so that all applicants receive some quantum of shares, they have announced. The IPO was opened and concluded on September 18, having being significantly oversubscribed in the run-up period to the official launch. It amounted to Rs 600 million. At the final count, the total value of applications received amounted to Rs 6.91 billion from 11,941 applicants. The extent of over-subscription (11.5 times) as well as the number of applications received were among the highest recorded in the country. The applicants were widely spread among retailers and institutions and included foreign investors. The response meant that the process of share allocation was not going to be straightforward, given that the directors were looking to achieve an equitable basis for such an exercise. With total demand amounting to 137,346,600 shares out of a possible 11,400,000 (excluding employees and their allotments), the allocation on a strict pro-rata basis would have been 8.3 per cent (i.e. 11,400,000/137,346,600). The directors have however ensured that the allocation has been formulated in a manner under which the majority of applicants would receive a percentage of their application in excess of the pro-rata average of 8.3 per cent. It is considered that this will be the most equitable basis. The directors are also mindful of the need to unlock the applicants' funds and accordingly, the refund process as well as the despatch of share certificates will be carried out as fast as possible, well ahead of the statutorily stipulated time schedules. Accordingly, the shares could be expected to trade in the third week of October. The market expects a strong secondary trading performance for the shares. |
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