Tundra Frontier Fund invests in WindForce shares

• Marks the Fund’s maiden participation in Sri Lankan IPO
• Says WindForce meets Fund’s three basic investment criteria with flying colours

Sweden-based global asset management company, Tundra Fonder’s Tundra Sustainable Frontier Fund has subscribed to an equity stake in WindForce Limited by taking part in the Fund’s first IPO issuance in Sri Lanka.

“During the month, we participated in our first Sri Lankan IPO. We have subscribed for shares in WindForce, which is the leading renewable player in Sri Lanka, and one of few listed alternatives within the frontier universe. We look forward to following the company as shareholders on their continued journey,” Tundra Sustainable Frontier Fund revealed in its monthly update for March.

Tundra Fonder, Founder and Chief Investment Officer, Mattias Martinsson termed WindForce as a “pretty amazing company” emphasizing the firm’s diversified sustainable energy portfolio.

WindForce Limited’s Rs.3.2 billion IPO, the largest IPO announced at the Colombo Stock Exchange (CSE) since 2011, drew 1,654 applications, reaching a total value of Rs.25.7 billion. The company’s IPO for 202,615,341 shares, at an issue price of Rs.16 per share, was oversubscribed by eight times on the initial day.

The Tundra Sustainable Frontier Fund noted that WindForce meets its three basic criteria with flying colours, which includes structural growth, strong corporate culture and management as well as clear societal benefits.

“At our meetings, we were impressed by both the strong ownership base with a number of Sri Lanka’s most reputable companies on the list of owners, and we were very impressed by the company management that has taken the company to its current position over the past ten years,” the monthly report added.

Further, the Fund also found the listing price-to-earnings ratio of WindForce to be very attractive given the nature of the business and future growth prospects.

Following the oversubscription of IPO, the board of directors of WindForce decided to allot a minimum of 42,028,125 ordinary voting shares, amounting to 20.7 percent of its Rs.3.2 billion IPO issuance, to ‘identified investors’. 

The Tundra Sustainable Frontier Fund’s exposure to Sri Lankan equities could potentially see an increase this month once WIndForce’s shares are listed on CSE. 

With no holdings sold or added in March, the Fund maintained its 8 percent exposure to Sri Lankan equities.