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| Sunday, 9 October 2005 |
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Business |  |
| News Business Features Editorial
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HDFC Bank
IPO to raise Rs. 550 million
On Wednesday this week, HDFC Bank, the housing loan provider who in over 20 years has grown from a building society, to one of the largest of its type will go public. The IPO will aim to collect Rs. 550 million, with the issue of 2.5 million shares at Rs. 220 per share. Chairman HDFC Bank, S. M. M. Yassen told the media that the price of Rs. 220 is a discount price. He said that at the end of the last financial year, the book value of an ordinary share of par value Rs 100 stood at Rs. 245.57. The shares will offer a considerable upside when listed in the CSE, he said. The subscription will remain open for 14 market days until closure at 4.30 pm on November 3. In the event of oversubscription the list will close at 4.30 pm on the day of oversubscription. CEO of National Asset Management Ltd (NAMAL) S. Jeyavarman said that the IPO will be oversubscribed, but it was difficult to say by how much. HDFC Bank, earlier a corporation, would enhance its performance the faster the organisation enters the private sector. Then, they could raise more money by issuing new instruments with people having more confidence that the management is more efficient. Being a small issue, Jayavarman did not see foreign investors showing much interest. The bank has done much in ensuring home loans in the rural sector and has 20 branches islandwide. According to the Central Bank, the housing market grows at 25 percent per annum. Around 75 percent of that growth comes from the lower and middle income segment of which HDFC Bank holds the largest market share, CEO, C. H. Sarathchandra said. HDFC Bank provides a further service of legal, technical and architectural to home builders. The manager and sponsor to the offering is the Merchant Bank of Sri Lanka Ltd. (E.L.) |
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