Sarvodaya Development Finance gears for Rs.1 bn IPO

Sarvodaya Development Finance (SDF) recently announced its Initial Public Offering (IPO) proposition and will be allowing potential investors the ability to submit applications for the IPO which will open on November 23rd.

SDF is a financial services provider that aims to uplift and empower rural masses across the nation by facilitating development opportunities with the prime goal of securing equitable economic growth and driving national development.

Capitalizing on the Lanka Jathika Sarvodaya Shramadana Sangamaya’s unique brand recognition and widespread societal networks, SDF has transformed into a tech-savvy financial services specialist with a diverse product range, with over hundreds of thousands of customers, served by 51 branches and customer service centres island-wide.

Investors stand to gain a plethora of benefits related to the forecasted highly positive company performance levels in the near future, offering investors the chance to invest into empowering Sri Lanka’s village entrepreneurs, while securing consistent returns.

By investing in the IPO, investors stand to benefit from the growth of the local SME industry, which has also seen highly positive growth forecasts over the turn of the year. 

The IPO is being offered with a discount of 17 percent to the share issue transaction PBV, enabling investors to gain a significant increase in value over time as the shares are traded, due to capital appreciation of price.

Managed by NDB Investment Bank, Sarvodaya Development Finance will offer​up to 45,454,546 ordinary voting shares at a price of Rs.22.00 per share through its IPO, resulting in a projected market capitalization of Rs.3.29 billion assuming full subscription at the Issue price. 

This translates into an estimated forward PER of 16.17 for FY22 and implied TTM PER (as at August 31, 2021) of 11.02x. 

Commenting on the launch of the SDF’s IPO, Chief Executive Officer, Nilantha Jayanetti said, “We are incredibly proud to launch SDF’s Initial Public Offering. SDF has worked hard over the years to empower rural entrepreneurs to the best of its ability, having used key concepts such as digitization to drive process efficiencies and ensure inclusive financing.

 Offering the IPO enables potentially interested investors in society to contribute to SDF’s on-going work on enhancing national development, echoing the age-old Sarvodaya goal of working together to achieve societal benefits.

The IPO launch is testament to SDF’s unwavering dedication to create equitable value for all stakeholders, with the ultimate goal of empowering individuals and enhancing livelihoods across the nation.” 

Interested potential investors can visit ipo.sarvodayafinance.lk to obtain more information on the process and submit their applications.