Equitable share allotment in record ODEL IPO

 Every valid application among the 22,548 received for shares of ODEL at the company's record-setting Initial Public Offer is to be allocated shares, with the smallest investors being satisfied in full and larger investors receiving allocations proportionate to their respective applications, the company has announced.

ODEL's recently concluded IPO of 16.7 million shares was oversubscribed by over 64 times, raising Rs. 16 billion compared with the IPO value of Rs. 250.5 million.

While the IPO allocated 1.2 million shares for employees, it also had a unique feature in that retail and non-retail investor categories were allocated separate tranches, so as to avoid smaller investors being crowded out by larger investors and to encourage wider share ownership. Notifying the Colombo Stock Exchange of the basis of allotment following the massive oversubscription, ODEL has announced that applicants within the 'Retail' category (applications for up to 5000 shares) would be allotted between 100 to 500 shares, based on sub-tranches within the category, thus ensuring that each applicant receives a minimum of approximately 9-10% of the respective amounts applied for. All applicants who had applied for 100 shares, numbering over 1,500 investors, will be satisfied in full. This retail category attracted almost 18,000 applicants, with the allocated 3 million shares being oversubscribed by over 8 times, the announcement said. The Non-Retail portion, consisting of applicants in excess of 5,000 shares, was over-subscribed by over 80 times, with the allocated 12.5 million shares attracting bids for over 1 billion shares from more than 4,500 investors. The ODEL Board of Directors has decided that the most fair allotment basis in this instance is to allot a minimum of 500 shares to all investors plus a pro-rata percentage of approximately 0.9844% of the remainder for each applicant.

The Employee portion of 1.2 million shares was also comfortably over-subscribed. As a result, all applications up to 10,000 shares in this category would be allotted in full, while others would be allotted 10,000 shares plus a pro-rata percentage of 58.5% of the balance applied for by each employee.

 "Given the overwhelming response to the issue, and the unprecedented level of over-subscription, working out a formula for allotment was a major challenge for the Board of Directors" ODEL Chairman Ruchi Gunewardene said. "We believe this is an equitable allotment that responds to the aspirations of all categories of investors."

ODEL founder and CEO Otara Gunewardene said: "I would like to thank all our investors for the trust and confidence they have placed in us. We have always believed in offering the best shopping experience to our customers and this emphatic endorsement will definitely inspire us to challenge ourselves to do even better."

ODEL's shares are expected to commence trading on the Colombo Stock Exchange in the first week of August.

Founded 20 years ago, the ODEL chain of definitive fashion and lifestyle stores now comprises of 12 outlets at Alexandra Place, Kohuwala, Mount Lavinia, Moratuwa, Panadura, Maharagama, Nugegoda (Warehouse), Dickman's Road, Ja-ela, Majestic City, Crescat (Backstage) and at the Bandaranaike International Airport. ODEL's 13th store opens at Battaramulla today, 16th July.

source - www.dailymirror.lk