Improved focus on exports

According to Maharaja Foods Limited (MFL) Chairman/Non-Independent Executive Director Vijayananth Guganathan, the main aim of the IPO is to finance business expansion and growth, in particular focusing on the export segment where the ‘Maharaja Foods’ brand has gained ground among the Sri Lankans living abroad as an ethnic food brand.
“We will use the majority of the IPO funds to set up a raw rice plant and a rice polishing plant, setup a gingelly oil plant, expand the building premises to increase warehousing capacity and secure additional working capital,” he said. 
The company plans to invest 35 percent of the IPO proceeds or Rs.44 million to setup a raw rice plant and a rice polishing plant within this year. Rs.25 million is to be utilised for expansion of the building to increase the warehouse capacity. In addition, Rs.50 million is to be utilised for partial settlement of borrowings and to meet the working capital requirements. Moreover, Rs.6 million will go towards settling payment for machinery purchased for the gingelly oil plant.

MFL aims to expand into Canada while further bolstering its presence in Europe, particularly in the Scandinavian nations, which boast a significant population of South Asian expatriates. To capitalise on the sizable expatriate communities of Sri Lankan and Indian origin and expatriates form other Southeast Asian countries, MFL plans to establish a central hub in Singapore, enabling enhanced accessibility and engagement with this target audience.
Atarah Capital (Private) Limited is acting as the financial advisor and manager to the offer and also as the sponsor. The total costs associated with the issue are estimated to be approximately Rs.9 million, which is approximately 7.2 percents of the IPO proceeds.
The company will also become the first CSE listing under the USAID CATALYZE Sri Lanka Private Sector Development Activity’s Funding Readiness Programme, aimed at facilitating equity capital for SMEs through CSE listings and private investors.