Softlogic Holdings – A company grew up with aggressive acquisitions.
The company invite public to subscribe 139 million shares at Rs 29.00 per share. Softlogic’s chairman told Reuters the IPO, Sri Lanka’s largest since 2005, will be used to retire the firm’s short-term debt. Subscription list opens on 9th June 2011 and will be closed on 29th June.
Summary of Softlogic IPO
Number of Shares to be Issued 139,000,000 ordinary shares
Issue Price Rs. 29/- (Rupees Twenty Nine) per share
Amount to be Raised Rs. 4,031,000,000/- (Rupees Four Billion and Thirty One million)
Minimum Subscription 500 shares (i.e. Rs. 14,500/-)
Applications in excess of 500 shares should be in multiples of 100 shares. The minimum subscription of 500 shares will be allotted to all successful applicants of the Company’s Initial Public Offering.
The History of Softlogic
Majority of people know Softlogic as the Nokia dealer for Sri Lanka but now it is a large holding company with wide interest in fast growing sectors of Sri Lankan economy. Within last few months they have acquired Sri Lanka’s largest listed hospital group Asiri Hospital Holdings.
Currently Softlogic has diversified in to Automobile, Finance, Health Care, Information Technology, Leisure and Retail Trading of consumer electronics.
Is it worth subscribing Softlogic IPO at Rs 29?
As usual Softlogic too not an under priced IPO. Current Market Price Earnings ratio of Colombo Stock Exchange is around 26. Softlogic Price Earnings Ratio based on Post IPO number of shares and annualized Earnings per share with available accounts is around 27 times. So I can say this is a slightly over priced IPO based on historical earnings.
Other thing that investors should consider is Softlogic issued 14 million shares through a private placement at Rs 72.00 per share in March / April 2010 and there was a sub division of shares 1 in to 10 in Feb 2011. This makes cost per share for those investors at private placement just Rs 7.20.
With these facts it is highly unlikely to have a sharp gain on first day of trading Softlogic shares. If you are a long term investor with holding power to hold two to three years, this IPO will give you good return in future.
You can download Softlogic Prospectus and Application form by visiting http://www.softlogic.lk/IPO.html
Always read the prospectus carefully before you make any investment decision.
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