Union Bank has drawn record subscriptions of 84 billion rupees or 225 times

milanka

milanka

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Feb 25, 2011 (LBO) - An initial public offer for 375 million rupees of stock in Sri Lanka's Union Bank has drawn record subscriptions of 84 billion rupees or 225 times making it the largest oversubscription ever in the island.

The registrars said 30,100 applications had been received for the issue which closed on Thursday, and from the applications processed so far 3.375 billion shares had been applied for.
The bank only offered 15 million shares to the public.

The previous high was with Singer Finance, a small finance company which attracted subscriptions for 135 times the offer, advisors NDB Investment Bank said.

econ

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I think many are bank guarantees..institutional investors just take bank garantees for full subscription of 15 million shares.

mark

mark

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econ wrote:I think many are bank guarantees..institutional investors just take bank garantees for full subscription of 15 million shares.

Union Bank's Initial Public Offering (IPO) will be opened for subscription officially from today. Daily Mirror Business learnt the issue is well accepted, as the Registrars to the offer have already received a large number of bank guarantees.

Sources revealed that the issue received bank guarantees worth 300 times the size of the issue, and about 100 bank guarantees have been received to fully subscribe it.

Union Bank in its Rs.375 million IPO, offers 15 million shares to the public. Out of the 15 million, 1.5 million will be offered to employees, while another 2.25 million will be to bank's customers who have been maintaining accounts with the bank for a minimum of six months as at January 31, 2011. Thus, only 11.25 million will be offered to the public.

The issue is scheduled to close on March 16 or the day on which the issue is oversubscribed.

According to an analyst, it is hard to guess the number of times the issue will be oversubscribed, with such large bank guarantees.

A recent research report published by Asha Phillip Securities Ltd states that Union Bank's upcoming IPO is a good buy for prospective investors.

The research report states the bank possesses a strong balance sheet amounting to Rs. 18.6 billion and a capital adequacy ratio of 28.97%, despite a credit growth of 27% in 2010.
Smile

Rocky

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High time that the CSE re-classifies the Corporate Investor companies under "Finance, leasing & Investments" category.

Companies should also change their articles of association to include that their main source of revenue is from Investment in the Stock Market.

See the amount of capital they could raise in no time. Say if any one of these big investors got the lions share, from where would they draw the cash. No time to sell other loss making entities.

SO?
Surprised

wis

wis

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The IPO companies themselves want to show that their IPO has been over subscribed this much times.

G

G

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I think it's high time for SEC or CBSL to step in.
Y'day SEC people mentioned they are considering the situation.

Some sources say that CBSL may introduce a minimum collateral requirement for Bank Guarantees.

Meta Trader

Meta Trader

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all hail bank guarantees king

tubal

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Someday there is going to be an IPO that doesn't get massively oversubscribed but still get a lot of bank guarantees. That day a lot of yukky stuff is going to hit the fan.

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Union Bank has drawn record subscriptions of 84 billion rupees or 225 times

1 Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Fri Feb 25, 2011 5:21 pm

milanka

2 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Fri Feb 25, 2011 5:35 pm

econ

3 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Fri Feb 25, 2011 6:17 pm

mark

4 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Fri Feb 25, 2011 6:18 pm

Rocky

5 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Fri Feb 25, 2011 7:20 pm

wis

6 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Fri Feb 25, 2011 11:51 pm

G

7 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Sat Feb 26, 2011 12:24 am

Meta Trader

8 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times Sat Feb 26, 2011 10:55 am

tubal

9 Re: Union Bank has drawn record subscriptions of 84 billion rupees or 225 times

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