Mar 29, 2011 (LBO) - Sri Lankan small investors who applied for a recent initial public offer by Free Lanka Capital Holdings will get all the shares they asked for under new rules set by the capital markets watchdog.
A stock exchange filing said investors in the retail category who applied for up to 10,000 shares in the Free Lanka IPO will get all they asked for.
The IPO of 300 million shares by Free Lanka Capital Holdings to raise 1.5 billion rupees was oversubscribed on the opening day.
For others in the retail category, those who applied for between 10,001 and 17,001 shares will get 10,700 shares and those who asked for between 17,001 to 20,000 will get 11,000 shares.
In the non-retail category, those who applied for between 20,001 and 200 million shares will get a minimum of 11,000 shares plus 0.94 percent on the balance number of shares rounded to the nearest 100.
Those who applied for over 200 million shares will be allotted a minimum of 11,000 shares plus 0.94 percent on the balance number of shares and another 19,950 shares, the statement said.
The Securities and Exchange Commission, the capital markets watchdog, recently gave retail investors and unit trusts preference in allocation of shares in IPOs.
The new rules effective from March 15 requires a minimum of 40 percent of the offered shares in an IPO to be offered to individual retail investors.
A minimum of 10 percent of an issue will be made available for allotment to Unit Trust Funds.
Sri Lanka's capital markets and banking regulators also plan to cap IPO bank guarantees, many covering the entirety of an issue, to ensure small investors a fairer share.
The move follows complaints that small investors were being edged out by big investors who use bank guarantees to apply for IPOs.
source - www.lbo.lk
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