By Indika Sakalasooriya
The private placement parties of Nanda Investments & Finance Limited (NIFL) emerged the happiest in a lackluster Colombo bourse yesterday, as the share price of the newly listed company went through the roof, appreciating over 1500 percent.
On the opening day (July 20), the market saw a meteoric rise of the NIFL share to the Rs.18 levels, though only 100 shares were traded. But yesterday, the share rocketed further up to Rs.27.90 and 825, while 100 shares changed hands.
NIFL was first formed over 50 years ago as a family owned company by Sirisena Mallawarachchi, who was popularly known as ‘Nanda Mudalali, who was also the owner of Nanda Motors. Presently his son Lalith Mallawarachchi functions as the Executive Chairman of the firm.
Before becoming a public company by way of a share Introduction as per regulatory requirement, NIFL had given away its shares to parties to raise regulatory Minimum Core Capital for the company.
The shares were issued to the members of the Mallawarchchi family who function as directors of the company as well as to outside parties at values ‘fair and reasonable to the company and to all existing shareholders of it’, as per the ‘Introductory’ document published with the Colombo Stock Exchange.
The Rs.80 million worth of NIFL share was offered to the company’s directors and private parties at Rs.10 and Rs.16.50 respectively. Then, the share was split on 1:10 ratio making effective cost of shares Rs.1 and Rs.2.
As per the ‘Introductory document’, the single largest shareholder of the NIFL is Taprobane Securities CEO Dinal Wijemanne, who bought his shares during the private placement deal at Rs.16.50 in December 2010.
The second leading shareholder is Lalith Mallawarachchi who holds 16.9% or 17 million shares.
Although sellers of the shares were not immediately known, it was more than obvious that those who bought the share at Rs.1 and 2 at private placements were selling, making a killing.
As at February 2011, NIFL’s ‘s book value per share was Rs 4.50 with a fully diluted annualised EPS of 19 cents for FY11E.
source - www.dailymirror.lk
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