Lankan Alliance Finance asked to resubmit IPO application
Rules prohibit paid-up capital enhancement within the period of a company applying for an IPO
The securities regulator has asked Lankan Alliance Finance Limited to resubmit its application for the initial public offering (IPO) as it has increased the number of shares through issuing stock dividends after the recent application to go public.
The new generation non-bank financial institution (NBFI) applied for raising Tk30 crore from the public through an IPO under the fixed price method in April this year to comply with the regulatory requirement of the central bank.
The Bangladesh Securities and Exchange Commission (BSEC) asked for resubmission with updated accounts, said BSEC Executive Director Rezaul Karim.
Keep updated, follow The Business Standard's Google news channel
IPO issue rules prohibit paid-up capital enhancement within the period of a company applying for an IPO and accomplishing it, he added.
Lankan Alliance Finance in 2022 paid 5% cash dividends alongside issuing 5% stock dividends, according to its CEO Kanti Kumar Saha.
"We are planning to resubmit the application with updated accounts," he added.
Lankan Alliance Finance Limited is a Joint Venture Financial Institution with multinational collaboration in Bangladesh, licensed by the Bangladesh Bank.
The majority stakeholder of Lankan Alliance Finance is People's Leasing Company (PLC), a subsidiary of Peoples' Bank, Sri Lanka's largest state-owned bank.
Local sponsors include representatives from companies such as Summit Group, Rangs Group, Alliance Holdings Limited, Green Delta Insurance Company Limited and Concept Knitting.
The company was formed in 2003 as Alliance Leasing & Finance Company Limited and changed its name in 2018 to Lankan Alliance Finance Limited after having a business license from the Bangladesh Bank in the same year.
In an extraordinary general meeting on 28 December last year, it again changed its name to Alliance Finance PLC and the name-changing process is yet to be completed, according to the CEO.
The company's loans and advances grew to over Tk314 crore at the end of 2022, from Tk108 in 2018 with a very low level of non-performing loans (NPL) at only 0.24%.
Over the period, its net profit after taxes grew from Tk2.97 crore to Tk5.18 crore.
Considering the pre-stock dividend paid-up capital of Tk100 crore, its earnings per share stood at Tk0.52 for 2022.
At the end of 2022 net asset value per share stood at Tk12.75 against a face value of Tk10 apiece.
