EXPOLANKA HOLDINGS PLC (EXPO.N0000)

cse.alpha wrote:

hhperera wrote:

Additionally it is well accepted, across world mkts that pvt placements do take place at a discounted value to the "sophisticated" investors, for these reasons.
E.g various tata group companies in india, twitter, recently facebook etc.. etc...
the practice is accepted and part and parcel of the financial world.

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Private placements usually occur at discounts to IPO price when there is a long time involved between the private deal and going public.

In the case of Expo, the private deal happened in December 2010 at Rs6, and the company is going public in May 2011 at Rs14 - this is too short a time frame to justify such a large discount.

well said alpha...

theory should not be just accepted. there are many more..

ethic & good management are seriously lacks in CSE & SEC..

Because of that only the regulators approve these kind of arbitrary prices and impose and remove ad-hoc rules and regulations...

The attempt by some pathetic new members to promote Expo IPO in this thread is rather disgusting. From the way they are begging people to ignore the fact that friends and friendly companies have been given shares at 6.00 while you and I are expected to pay 14 tells me that they are people with vested interests.

You decide whether you want to listen to these unkown new comers or to members like cse.alpha and innam who have proven their class.

http://www.ft.lk/2011/04/27/john-keells-stock-brokers-recommends-expolanka-as-%e2%80%98buy%e2%80%99/

Please make your own investment decision.

With JKSB being part of JKH Group who are co-managing the Expo issue & JKH also having 83 million shares at Rs6/= in Expo, we can't expect anything else than a 'buy' recommendation from them

JKSB are forecasting a FY12E eps of Rs1.03 for Expo, which puts the FY12E PER at 13.6x at IPO price of Rs14/=

Expo FY11E net profit is estimated at Rs1.5 billion - reducing capital gains of Rs313 million on sale of Expo Aviation, gives 'normalised' FY11E net profit of Rs1.2 billion, and normalised FY11E eps of Rs0.66

This suggests that pvt deal at Rs6/= in december 2010 was issued at FY11E PER of 9.1x - a 50% premium is now being asked for in valuations terms at IPO price using FY12E earnings.

Good analysis CSE alpha. This is not the first time JKH have exploited the retailers. Remember KHL rights issue? They dumped millions of shares bought at 12 to retailers at 20+. Now see where KHL price is?

Guys, remember promoters of IPOs could be connected to the company. Because retailers don't own the share just yet.

I'm too receive there IPO View. i think after ODEL they made IPO view. i think this would be another good IPO if WAPO & JKH Hold thr share as long term. i think in that case it would reach 19+.....

JKH is always target on long term investments for thr JKSB clients .... tht may b the reason

i going with this IPO since im very confident with EXPO

i will not subscribe , better to buy at secondary mkt ,what will happen if 300mn PP shares come to mkt for selling

Yes, I will definitely buy from the secondary market.

MoneyMaker wrote:Yes, I will definitely buy from the secondary market.

Yes me too, I smell a trap

Chabbi wrote:I'm too receive there IPO View. i think after ODEL they made IPO view. i think this would be another good IPO if WAPO & JKH Hold thr share as long term. i think in that case it would reach 19+.....

JKH is always target on long term investments for thr JKSB clients .... tht may b the reason

i going with this IPO since im very confident with EXPO

Friend,
Can you give us any acceptable reason for that...? I mean with some facts

What would be the trading price of the first day.I think it might be around 20-25

npc86 wrote:

Chabbi wrote:I'm too receive there IPO View. i think after ODEL they made IPO view. i think this would be another good IPO if WAPO & JKH Hold thr share as long term. i think in that case it would reach 19+.....

JKH is always target on long term investments for thr JKSB clients .... tht may b the reason

i going with this IPO since im very confident with EXPO

Friend,
Can you give us any acceptable reason for that...? I mean with some facts

Y not i always have a reason when i buy or sell share

Juss check my earlier statement all people are worried abt WAPO selling .. in case if they hold & other Pvt Placement receivers holds ??? then what u think ???? can u imagine the price ?? I believe that

Totally dissapinted with person who made me negative reputation I had reason ... but people dont read them properly

Expolanka pre-IPO sell down creates controversy

Analysts and stock brokerage fraternity in the country were seen little disturbed and distressed about the pre-IPO sell down of the Expolanka Initial Public Offering (IPO), at a significantly low price compared to the offer price.

According to the prospectus of the Expolanka IPO, the sell down of each share by the owners of the company has taken place at Rs.6, while through the IPO, public is offered Rs. 14 per share.

“The question that has been bugging many is, by subscribing to this share at the IPO, aren’t they letting those who bought shares by way of private placements and sell downs at lesser prices (than the IPO price), make money?” a stock market analyst opined on the grounds of anonymity.

He also said that serious doubts have surfaced over the real share value, in the backdrop of company owners selling a considerable part of their stake at Rs.6 per share.

“What we should notice is that, the offer price is 133 percent higher than the sell down price”

The explanation given for the sell down at Rs.6 is, it was done late last year before latest Expolanka financial results came into light.

“There’s no significant difference between the pricing in September 2010 and the pricing now,” Krishan Balendra, President, Corporate Finance & Group Strategy of John Keells Holdings was quoted as saying to Lanka Business Online recently.

However, according to Capital Trust Director Research, Sarath Rajapakse, there is going to be a massacre of small investors once the Expolanka shares hit the market.

“Well the IPO will be oversubscribed, but if the directors have sold down shares to private investors at Rs.6 per share, it means they are going to sell them after IPO anyway,” added Rajapakse.

At the presentation made to the stock brokering community on Tuesday, the managers to the issue John Keells Capital had refused to give any assurance as to whether the private investors will sell at the expense of small retailers, once Expolanka shares enter the CSE trade floor.

Krishan Balendra told Mirror Business at the official launch of the IPO on Tuesday that Expolanka’s directors have sold their holdings to private investors and that does not count as a private placement.

“SEC’s “Lock In Rule” has no relevance to this situation” Balendra added.

Meanwhile, Head of Research at CT Smith Stockbrokers Talaal Maruzook highlighted that Expolanka shares is still attractive, given the fact that Expolanka shares are offered at a discounted price compared to other companies that are listed on the CSE board, under the Diversified Holdings Sector. However, two other companies listed under Diversified Holdings including Richard Pieris (RICH) and Dunamis Capital (CSEC) is also trading at less than Rs.14 levels as per market data.

Expolanka Holdings is to raise Rs. 2.4 billion by issuing 172 million ordinary voting shares at Rs. 14 each, with the IPO opening on May 12.

Expo Pre-IPO private deal at Rs6/= being questioned not only in this forum, but also in other press reports - read the comments on LBO and LBR too

Daily Mirror - 28/4/11
http://print.dailymirror.lk/business/127-local/42260-expolanka-pre-ipo-sell-down-creates-controversy.html

Lanka Business Online - 27/4/11
http://www.lbo.lk/fullstory.php?nid=638341804#cm

Lanka Business Report - 26/4/11
http://www.lbr.lk/fullstory.php?nid=201104261540013512#div_comments_cnt

Truly reflecting its “Business beyond borders” motto, the Rs. 2.4 billion worth Initial Public Offering (IPO) of Expolanka Holdings Ltd is being promoted among prospective investors overseas.
The first phase of the roadshow was held in Singapore yesterday whilst today it will be held in Mumbai.
CT Capital Ltd., the joint managers and financial advisors to the Expolanka Holdings IPO, is spearheading this international initiative. A team comprising CT Capital and Expolanka executives are taking part in the exercise.
Expolanka’s business interests span freight and logistics, international trade, manufacturing and strategic investment sectors. The Group’s vast global network of operations stretches across 38 cities in 11 countries including Sri Lanka, India, Bangladesh, Vietnam, the Middle East and Africa.
Expolanka Holdings launched its Initial Public Offer of 172 million voting shares at Rs. 14 each, to raise a sum of Rs. 2.4 billion (Approx. US$ 22 million) on 26 April 2011. The bulk of the funds from the IPO would be used for working capital, with the rest going for expansion and loan repayment. The issue officially opens on 12 May 2011.

http://www.ft.lk/2011/04/28/expolanka-ipo-roadshows-in-singapore-and-mumbai/

I called to SSP corporation. they telling there is not a private placement. it was a sell down. they can sell their shares also when secondary market which they bought by Rs6.

can i know the meaning of sell down?

I was waiting to try luck from my first IPO from EXPO LANKA. But after herd this private placement of 6Rs per share thought not to go behind this.

pdgsuranga wrote:I called to SSP corporation. they telling there is not a private placement. it was a sell down. they can sell their shares also when secondary market which they bought by Rs6.

can i know the meaning of sell down?

Read the below link , You would then know what is a sell down and what is a PP. Hope it helps.
http://srilankastockpicks.blogspot.com/2011/03/its-sellout-not-pplacement-director.html

avilon wrote:What would be the trading price of the first day.I think it might be around 20-25

There are several analysis in this forum about expolanka . Diffecult to predit. read those posts , underestand carefully and then decide.

By Indika Sakalasooriya and Jithendra Antonio

Analysts and stock brokerage fraternity in the country were seen little disturbed and distressed about the pre-IPO sell down of the Expolanka Initial Public Offering (IPO), at a significantly low price compared to the offer price.

According to the prospectus of the Expolanka IPO, the sell down of each share by the owners of the company has taken place at Rs.6, while through the IPO, public is offered Rs. 14 per share.

“The question that has been bugging many is, by subscribing to this share at the IPO, aren’t they letting those who bought shares by way of private placements and sell downs at lesser prices (than the IPO price), make money?” a stock market analyst opined on the grounds of anonymity.

He also said that serious doubts have surfaced over the real share value, in the backdrop of company owners selling a considerable part of their stake at Rs.6 per share.

“What we should notice is that, the offer price is 133 percent higher than the sell down price”

The explanation given for the sell down at Rs.6 is, it was done late last year before latest Expolanka financial results came into light.

“There’s no significant difference between the pricing in September 2010 and the pricing now,” Krishan Balendra, President, Corporate Finance & Group Strategy of John Keells Holdings was quoted as saying to Lanka Business Online recently.

However, according to Capital Trust Director Research, Sarath Rajapakse, there is going to be a massacre of small investors once the Expolanka shares hit the market.

“Well the IPO will be oversubscribed, but if the directors have sold down shares to private investors at Rs.6 per share, it means they are going to sell them after IPO anyway,” added Rajapakse.

At the presentation made to the stock brokering community on Tuesday, the managers to the issue John Keells Capital had refused to give any assurance as to whether the private investors will sell at the expense of small retailers, once Expolanka shares enter the CSE trade floor.

Krishan Balendra told Mirror Business at the official launch of the IPO on Tuesday that Expolanka’s directors have sold their holdings to private investors and that does not count as a private placement.

“SEC’s “Lock In Rule” has no relevance to this situation” Balendra added.

Meanwhile, Head of Research at CT Smith Stockbrokers Talaal Maruzook highlighted that Expolanka shares is still attractive, given the fact that Expolanka shares are offered at a discounted price compared to other companies that are listed on the CSE board, under the Diversified Holdings Sector. However, two other companies listed under Diversified Holdings including Richard Pieris (RICH) and Dunamis Capital (CSEC) is also trading at less than Rs.14 levels as per market data.

Expolanka Holdings is to raise Rs. 2.4 billion by issuing 172 million ordinary voting shares at Rs. 14 each, with the IPO opening on May 12.

Source - www.dailymirror.lk

It is disappointing that IPO is priced at SLR 14 when the company/directors sold large volume of shares at a much discount price of SLR 6 just few months before.

This may affect the success of this IPO. We have to wait and see.

It is good to see Capital trust securities has shown thier consern of these type of unethical things done by companies.

econ wrote:It is good to see Capital trust securities has shown thier consern of these type of unethical things done by companies.

Lol yeah! if mr Sarath Rajapakse is negative about a share it's probably really really bad!!

The above press report is covered By Indika Sakalasooriya and Jithendra Antonio. One of them is a member of this forum and we extend our thanks to him for highlighting the Expolanka matter.

Note : Above persons are not known to me or my profession not related to press.

i will not subscribe for this,wait and buy @ trading floor ,what about you guys?

The reason given by Mr. Krishan Balendra of John Keels for this price difference is hilarious.

He said the low price of 6/- was determined because they did not not see financial reports before the the deal as it was done before releasing of the 2010 reports.
After seeing the reports only they have realized a share of their company is worth 14/- rupees ! (and we have to buy at that price.)

I will never subscribe to this IPO. This is utterly unreasonable offer. This is only my personal opinion, the others may think differently.

DXB2252 wrote:i will not subscribe for this,wait and buy @ trading floor ,what about you guys?

If expo trades at 6.00 I will also think of buying. Otherwise there are plenty of more ethical companies going at bargains prices.

DXB2252 wrote:i will not subscribe for this,wait and buy @ trading floor

Yes - So am i on Expo Lanka matter. Looking forward to Softlogic IPO .

there is a risk here.....Guys who got thru private placement can even dump few million at around 7~8 and destroy the share price so that they can easily collect more and more at that price.....better not to apply.Softlogic is on the way....why bother abt taking undue risk..