Regulatory Alerts2014-12-23
Added · Updated
Directive on Disclosures Regarding the Basis of Offer Price in Initial Public Offers
The Securities and Exchange Commission of Sri Lanka directs the Colombo Stock Exchange to mandate specific disclosures in the prospectuses of companies seeking post-IPO listings. Entities must disclose the basis for the IPO price or price bands according to Schedule I, which requires reporting Net Asset Value multiples, qualitative factors, and quantitative metrics such as Earnings Per Share, Return on Equity, and Price/Earnings ratios relative to peers. Alternatively, entities may choose to obtain an independent valuation or publish an investment bank research report justifying the price, with the latter required to be hosted on relevant websites for two months. This directive becomes effective on 1st January 2015.
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