Financial Times

Dialog IPO attracts foreigners
The Colombo bourse's largest initial public offering (IPO) so far, Dialog Telekom, is being pursued by over 40 leading investment banks and fund managers from around the world.

“We have forty appointments with some leading investment banks and fund managers within the next nine days,” Vajira Kulatilaka, CEO NDB Investment Bank, who are the promoters of the issue, told The Sunday Times FT.
He said there are interested parties in Hong Kong, Singapore and the UK, and they will be talking to over 30 companies in Malaysia. He said they will have a road show in all these countries and that Dialog has allocated 40 percent to foreign buyers. Out of the balance 60 percent, 25 percent will be allocated to local institutional investors and 35 percent to local investors.

“There are only about three to four companies in emerging markets who are into the mobile phone sector and very few out of the three have got a more than 60 percent market share like Dialog. Since the trend is to invest in mobile telecom sector in emerging markets, Dialog has attracted many foreign parties,” Kulatilaka said. He said they are trying to have appointments with some clients in the Middle East.

Keeping with the company’s ‘077’ number, the IPO will open on the July 7, but bidding started last Friday where investors can bid for Rs.8 and Rs.12 per one rupee share. The demand for shares will be aggregated at each specified price level in descending order, starting from the highest price of Rs.12 .
The issue has two parts - 422.2 million of existing ordinary shares owned by Telekom Malaysia and 290.1 million new shares. The company is to apportion a 2.7 percent stake amounting to 199.89 million additional shares to an employee share option scheme, making parent company Telekom Malaysia, own 87.7 percent in Dialog.

The company has invested heavily in building their brand equity for the ‘Dialog’ brand and its brand portfolio has recently been valued at Rs.12.2 billion to Rs.16 billion by Brand Finance India Ltd., signifying a contribution up to 23 percent of the enterprise value of the company.

Back to Business