January 23, Colombo (LNW): The Colombo Stock Exchange (CSE) is setting an ambitious target for 2025, aiming to host 20 initial public offerings (IPOs), with five to six already in the pipeline, as announced by its Chairman, Dilshan Wirasekara.
This comes after a record-breaking year for capital mobilisation in 2024, where the CSE saw a substantial rise in funds raised through IPOs, rights issues, and debt issuances, reaching an unprecedented total of approximately Rs.170 billion.
While the exchange had originally aimed for 10 IPOs in 2024, it fell short of this target, managing to complete only four to five offerings.
One notable casualty was the highly anticipated IPO from LTL Holdings, which was set to be the largest on the CSE to date.
The company had planned to raise up to Rs.20 billion by offering 22.3 per cent of its shares, but the listing was delayed due to legal challenges.
The Cabinet is expected to make a final decision regarding the future of the LTL Holdings IPO in the coming months.
Wirasekara explained that the primary challenge facing IPO activity is the relationship between market valuations and the decision of companies to go public.
“Many companies hesitate to list when market valuations are low, as they may not be able to achieve their desired valuations. However, given the recent positive trajectory of market valuations, driven by a process of rerating, we expect more companies to consider listing this year,” he said, highlighting a more optimistic outlook for the IPO market in 2025.
On the subject of the long-awaited demutualisation of the CSE, Wirasekara noted that progress has been made, but the ball is now in the government’s court. All stockbroking firms on the CSE have agreed to the draft bill, which proposes a 60:40 ownership split between member firms and the Capital Market Development Fund.
Once the government gives its approval, the demutualisation process will move forward, opening the door for more modernisation and operational flexibility for the exchange.
The CSE remains hopeful that these developments will encourage a more dynamic and accessible market, attracting both local and international investors.
