The initial public offering (IPO) by Lanka Credit and Business Finance Limited (LCBF), which successfully closed on October 26, 2021, within minutes of opening amidst strong investor interest, is set to debut for secondary market trading on the Colombo Stock Exchange (CSE) on November 16, 2021. 

The IPO attracted total funds amounting to Rs.760 million, recording an oversubscription of 2.5 times of the initial tranche. The successful IPO validates the exemplary business turnaround demonstrated by LCBF having acquired a distressed non-bank financial institution (NBFI) in 2018.

It is believed that this would serve as a case study for the recapitalisation and resurrection of distressed NBFIs in Sri Lanka. NDB Investment Bank Limited has advised and guided LCBF as the sole financial advisor throughout this journey, starting from the time of the acquisition, through multiple equity raises to bolster regulatory capital and up to the recently concluded successful IPO.

The recent financial performance of LCBF has been in line with the company’s plans and growth in business operations. As per the un-audited interim financial statements for the six months ended on September 30, 2021, published last week, LCBF has recorded a PAT of Rs.52.6 million, already surpassing the full-year profit after tax recorded in the previous financial year. 

At the same time, regulatory capital levels have been strengthened thereby meeting the regulatory core capital levels envisaged by the Central Bank of Sri Lanka by the end of December 2021 and setting a healthy platform to leverage the same and grow the loan book.

LCBF has also recently secured the required regulatory approvals from the Central Bank of Sri Lanka for its ambitious branch expansion plan. Accordingly, the management is currently finalising preparations to launch four new branches prior to the end of the financial year, taking the total branch network to 12. This marks the emergence of LCBF from its roots in the Southern province as a noteworthy player in the NBFI industry with a growing islandwide network. 

LCBF intends to execute its long-term strategic plan to achieve a wider presence across Sri Lanka and pursue both organic and inorganic growth opportunities to achieve its objective to be a foremost provider of financial services in the non-bank sector in the country.