Financial Times

HDFC to raise Rs 500 mln with IPO in June
State-owned Housing Development and Finance Corporation (HDFC) is to raise Rs. 500 million through an IPO in June issuing 2.5 million shares in a bid to expand its operations.

Analysts said since housing and construction is a growing sector in the country, the HDFC issue will be well received by investors. "Sectors that are expected to grow in the future are mainly to do with rebuilding and the HDFC issue will do fine," Chinthaka Ranasinghe, Head of Research, John Keels Stockbrokers said.

Analysts said that in a market that has a low capitalisation, an issue representing a growth sector such as housing will boost the liquidity. "It will be very positive since the market needs more big companies to increase its capitalisation," Asanga Seneviratne, Managing Director, Asia Securities said.

HDFC has a Rs. 40 earnings per share and a book value of around Rs. 270. Dimuthu Abeyesekera, CEO, Asha Phillip Securities Ltd., said HDFC being a state-owned housing development entity, will make the issue more attractive to the public.

"On the back of the peace process, HDFC will have a lot of access to cheap funds, which they can distribute among the public for housing finance," Angelo Ranasinghe, Business Development Manager, Bartlett Financial Services said. The issue is to be managed by the investment banking arm of the Merchant Bank of Sri Lanka.

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