Rs. 8 billion NDB right issue seen as a market stimulant

An NDB right issue worth Rs. 8 billion will provide an impetus to the CSE in the present highly volatile market situation, stock market analysts said.   

In the foregoing context, it is said that 17.1 million rights (allotments) were traded between a high of Rs. 2.10 and a low of Rs. 1.60 before closing at the latter level. This was on top of five million traded the previous day. The NDB rights issue involves selling 106.78 million shares on the basis of 28 new shares for 61 held at Rs. 75 each. Analysts said that investors were willing to pay a premium in order to qualify for the upcoming rights. It reflects their keenness and confidence. The last date for renunciation of rights is May 4.

The purpose of the rights issue is to strengthen the bank’s Tier 1 capital base to facilitate its asset book growth.NDB is also offering 37.67 million new shares (9.9% stake) by way of a private placement at Rs. 85 per share to Norwegian development finance entity Norfund, boosting the Lankan bank’s growth and expertise to empower the private sector. 

-Sunday Island

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