The Colombo Stock Exchange (CSE) adopted progressive changes to the CSE’s listing framework for new listings, offering a wider choice of listing options for companies wanting to list shares on the Main and Diri Savi Boards.
This action has been taken by taking into account the role played by capital markets in the growth of the corporate sector and the importance of offering multiple avenues through which companies aspiring for growth can access capital markets,
An analysis of recent listings on the CSE indicates that these amendments in particular have paved the way for two companies to list on the CSE and access capital market-based funding valued at Rs. 4.7 billion.
Both IPOs were oversubscribed on the opening day and by 16+ times collectively drawing considerable investor interest at the time.
Interestingly, the listing framework prior to the amendments made by the CSE may not have attracted these two corporates – indicating that the amendments have been successful in making a stock market listing a possibility for a broader array of aspiring issuers.
These recent issuers representing two different industries have benefited from the CSE’s initiative in broad basing the profit-oriented eligibility requirement applicable to the Main Board.
Prior to the amendments, the CSE Listing Rules required that all companies aiming to list on the Main Board demonstrate net profit after tax for three consecutive financial years. Three alternatives to this requirement were introduced by the CSE as part of the amendments.
The CSE’s Main Board listing criteria now accepts companies that can demonstrate an aggregate net profit after tax for three consecutive financial years, meaning that companies aiming to list on the exchange are no longer required to be profitable in each of the three financial years immediately preceding the date of the initial listing application.
Further, companies that cannot meet the …read more
Source:: LNW English