JXG announces Rs. 5bn IPO to fund new growth cycle

 Pic by Kithsiri de Mel

• Proceeds earmarked for a dual-track expansion strategy that combines domestic consolidation with regional diversification
• Overseas expansion will focus on Southeast Asia and selected African markets

By Shabiya Ali Ahlam

Janashakthi Group’s holding company JXG yesterday announced a Rs. 5 billion Initial Public Offering (IPO), marking a decisive push to scale its financial services platform across Sri Lanka and selected overseas markets, while reshaping its capital structure to support expansion and balance sheet flexibility.

The IPO will issue 500 million ordinary shares at Rs. 10 each, offering a 21.74 percent post-listing stake. Based on an independent valuation by Deloitte Sri Lanka of Rs. 15.92 per share, the offer is priced at a 37.18 percent discount, positioning it among the more aggressively priced financial-sector listings in recent years. 

The issue opens on 9 April 2026, with First Capital Advisory Services acting as manager and financial adviser. 

Proceeds are earmarked for a dual-track expansion strategy that combines domestic consolidation with regional diversification. Of the total funds, Rs. 3.5 billion will be deployed to deepen its footprint in general insurance, microfinance, and non-bank financial institutions, while Rs. 500 million is allocated for overseas expansion within investment banking, insurance and NBFI segments. A further Rs. 1 billion will be used to retire debt and optimise the group’s capital structure.

“The launch of our IPO is a historic step in JXG’s journey. It provides the capital to expand our financial services, go global, and strengthen the balance sheet. Importantly, listing strengthens the commitment to transparency, accountability and governance to all stakeholders,” said JXG Chairman Chandana De Silva, describing the IPO as a defining milestone for the group.

Group CEO Ramesh Schaffter framed the listing as both a continuation of legacy and a strategic acceleration of growth, underscoring an institutional push toward scale and diversification.

“It is part of our founders’ DNA  - not to be satisfied with where we are, but to constantly pursue growth,” he said. Schaffter added that the group’s expansion model will be driven through both organic and inorganic pathways.

“Janashakthi has always been defined by the strength of its people. It is our people who have helped us build the next generation of leaders. Today marks the beginning of a new chapter. It is a significant milestone, but not a destination in itself,” he added.

Schaffter also reiterated the group’s intent to measure success through impact rather than scale alone, positioning the IPO as a mechanism to extend financial inclusion and deepen market reach.

A key strategic realignment embedded in the IPO is JXG’s re-entry into the general insurance segment, from which it exited in 2018. Management cited more attractive valuations in the current market cycle, the expiry of non-compete restrictions, and proprietary capabilities, including legacy brand equity and in-house insurance technology systems.

The group has already conducted preparatory work over the past two years and is expected to re-enter either through a greenfield or acquisition-led approach, with execution targeted within the year.

Overseas expansion, meanwhile, is being staged cautiously, with a focus on Southeast Asia and selected African markets. According to JXG, it has already engaged with potential partners and advisers in markets including Bangladesh, while assessing regulatory compatibility and market maturity.

“We offer a bouquet of services. Depending on the country and its regulatory framework, we will introduce what is most appropriate,” Schaffter said when the floor was open for questions.

He noted that the group will avoid a “full-stack” entry approach, instead deploying services selectively across insurance, capital markets and advisory functions depending on local conditions.

The overseas expansion plan will be gradual, with entry into two countries expected within a year and expansion into up to five markets over a three-to-five-year horizon. While Rs. 500 million has been ring-fenced from IPO proceeds, management indicated that internal accruals would play a larger role in funding offshore growth.

On sector allocation, the Rs. 3.5 billion domestic investment pool will primarily support expansion in general insurance and microfinance-linked NBFI operations, while also providing capital buffers for potential transactions in life insurance and cross-border opportunities, including previously explored entry points such as Bangladesh.

The group also clarified that the IPO does not involve any secondary sale. 

“This is entirely a new share issue. The family previously held 100 percent ownership and is diluting through issuance of new shares. There is no sale of existing shares,” Schaffter confirmed.

On capital management, the group outlined an active liability strategy aimed at reducing funding volatility. A significant portion of short-term debt has already been converted into longer tenors of three to five years, with further efforts underway to diversify funding sources and reduce reliance on callable instruments such as commercial paper.

The listing adds a new layer to an already multi-entity structure, with JXG holding exposure to listed subsidiaries including First Capital entities, Janashakthi Life and Janashakthi Finance—companies that have been among the better-performing counters on the Colombo Stock Exchange (CSE) in recent years, supported by high dividend payout ratios.