Lanka IOC storming Sri Lanka

Venkatachari Jagannathan
20 October 2004

For the officials of Lanka IOC, a wholly owned subsidiary of Indian Oil Corporation, it has been a pleasant experience in the island. Says managing director, M Nageswaran, "Till now none of the cheques issued by our dealers have bounced."

Perhaps this has prompted the company to reward the dealers by reserving some portion of its forthcoming public issue in their favour. According to Nageswaran, Lanka IOC has drawn an investment plan of $100 million.

For investors, too, Lanka IOC is offering something new - the experience of buying shares in the book—building process. According to Nageswaran, the company with an equity base of $40 million will be coming out with a premium public issue of 1.33 million shares to raise around Sri Lankan Rupees (SLR) 2.3 billion. The price band is expected to be between SLR20-30.

Last fiscal the company posted a turnover of SLR14.53 billion and expects to reach SLR33 billion in the current fiscal.

The shares will be listed in Sri Lanka''s only stock exchange, the Colombo Stock Exchange, whose members have a collective market capitalisation of SLR 75 billion.

The MoU signed in 2002 between Indian and the Sri Lankan governments charted IOC''s path to the island incorporating Lanka IOC as a wholly owned subsidiary. That year December Lanka IOC signed an agreement with the island''s Public Enterprise Reforms Commission and the Board of Investment of Sri Lanka.