CSE targets 20 IPOs in 2025

• Market operator shares 5 to 6 IPOs already in pipeline
• 2024 targeted 10 IPOs  
• CSE chief points out key challenge for IPO activity is relationship between market valuations and company decisions to list

 By Nishel Fernando

The Colombo Stock Exchange (CSE) is targeting 20 initial public offerings (IPOs) this year, with the IPOs with five to six already in the pipeline, according to its Chairman Dilshan Wirasekara.

In 2024, capital mobilisation on the CSE, which includes funds raised through IPOs, rights issues by the existing companies and debt issuances, reached an all-time high of around Rs.170 billion.

However, the CSE initially targeted 10 IPOs in the course of 2024; it fell short of this target, reaching only four to five IPOs in the year.

In particular, LTL Holding’s IPO did not come to fruition last year, due to the initial legal challenges.It was set to be the largest IPO to date on the CSE, with plans to raise up to Rs.20 billion by offering 22.3 percent of the company. The Cabinet is expected to make the final decision on the fate of this IPO. According to Wirasekara, a key challenge for IPO activity is the relationship between market valuations and company decisions to list. 

“Typically, companies are reluctant to go public when market valuations are low, as they cannot realise their full value. However, given the current trajectory of market valuations, driven by rerating, more companies could decide to go public this year,” he said.

Commenting on the demutualisation of the CSE, Wirasekara noted that the ball is in the government’s court. Reason being, all stockbroking firms on the CSE have agreed to the draft bill for the demutualisation at a 60:40 percent split for the member firms and 30 percent for the Capital Market Development Fund.