Janashakthi Group holding company JXG has allocated 243 million shares — 48.6 percent of its initial public offering — to strategic investors on a preferential basis, according to the company’s basis of allotment following an oversubscribed listing.
The offer consisted of 500 million new ordinary voting shares at Rs. 10 each, targeting Rs. 5 billion. It attracted 20,359 valid applications for a total of 1,515,524,200 shares — a cumulative value of more than Rs. 15.15 billion, representing roughly three-times oversubscription.
The preferential allocation was made within the Non-Retail category, which was originally assigned 325 million shares in the prospectus. Other Non-Retail applicants received a minimum of 4,000 shares plus 9.6365 percent of any applied quantity above that amount. Retail Individual Investors received a minimum of 4,000 shares plus 17.45625 percent of their applied quantity above the minimum, while Unit Trust Investors received 500,000 shares plus 65.0636 percent. Janashakthi Group employees received 100 percent of their applied quantity up to 500,000 shares and 33.7879 percent above.
Analysts told EconomyNext that while the JXG prospectus granted the board discretion to decide the allotment basis in a “fair and equitable manner” in the event of oversubscription, it did not explicitly pre-define a preferential allocation for strategic investors. They said such allocations are often used to ensure IPO success and build investor confidence, but noted the scale of the preferential block.
The group plans to use Rs. 3.5 billion of the proceeds for expansion across insurance and non-bank financial services, Rs. 0.5 billion for regional expansion into East and Southern Africa and Southeast Asia, and Rs. 1 billion for debt optimization.
Janashakthi Group is the parent of Janashakthi Insurance PLC, First Capital Holdings PLC, and Janashakthi Finance PLC. The JXG IPO opened on April 9 and was oversubscribed on the first day.
