The Securities and Exchange Commission (SEC) has carried out a study to assess the possibility of mandating the justification of the ‘fairness of the Initial Public Offering (IPO) offer price’ by an independent and competent party, an year-end review by the SEC noted.
Overpricing was identified as one of the key reasons for some of the post-war IPOs to fail by a section of the country’s analyst community.
Meanwhile, the SEC and the Colombo Stock Exchange (CSE) is currently engaged in discussions with information technology (IT) and business process outsourcing (BPO) companies in the country to identify the possibility of getting them listed.
“IT/BPO industry initial discussions were held in November 2013 to identify the possibility of listing to raise capital. A follow-up awareness session with representatives of the Sri Lanka Association of Software and Service Companies (SLASSCOM) is scheduled for January 2014,” the review noted.
Both the SEC and CSE have been trying to get more privately held companies to go public to develop the country’s capital market. A separate initiative is currently underway to see the possibility of getting the state-owned enterprises.
With the intention of attracting further foreign direct investment into the country, a concept paper has been finalized to list the Board of Investment (BoI) companies.
“The inputs from the CSE and BoI were also considered during the process. A presentation in this regard was made to BoI representatives,” the SEC said.