Sri Lanka Renuka Agri IPO draws over Rs3bn

Nov 30, 2009 (LBO) – A 270 million rupees initial public offer of Renuka Agrifoods, a firm that makes coconut-based food products, received applications worth 3.1 billion rupees, its managers said. Merchant Bank of Sri Lanka, managers to the issue which closed Friday afternoon, the opening day itself, said they received 5,016 applications for 1,386 million shares.

The IPO was for 120 million shares at 2.25 rupees each.

The Renuka Agrifoods share was seen as under-valued by analysts based on annualized current year’s profits of around 50 cents per share.

The company said it will use the funds to repay high-cost loans and to expand, increasing coconut cultivation and production of coconut-based products and strengthening its overseas and local marketing network,